In recent months, the UK accounting industry has become enamoured with talks of refining the moratorium process to generate a more debtor-friendly experience.\u00a0\r\n\r\nAs businesses continue to recover from the recent pandemic and get their operations back on track, debtors have continuously urged the government to rework their moratorium process for favourable conditions. Amid talks of ease and revisions, however, lawmakers and accounting firms alike have also raised new questions over the practicality of a new mortarium because of practicality issues rooted in UK insolvency.\r\nA new approach to the moratorium process\r\nRecently, the government introduced the revised and debtor-favourable version of the moratorium process in the form of the Corporate Insolvency and Governance (CIG) bill. \r\n\r\nWith its recent release slated to be far more favourable for the terms and conditions that debtors seek in these times, insolvency practitioners have looked to the update as an effective means of balancing concerns out. Among the new additions that the CIG bill has brought about, however, the scope of the \u201cmonitor\u201d position has been received with much concern as its structure poses a potential hindrance to the bill\u2019s use.\u00a0\r\n\r\nThroughout what was considered by many practitioners as one of the quickest examples in history, the CIG bill was enacted in just a little over a month\u2014\u00a0but some say it may have been too soon. Now that the revisions are in effect, UK insolvency law is currently in the process of adjusting to different temporary and permanent changes that include a new moratorium process.\r\n\r\nGenerally speaking, the new process is distinguishable from past iterations because it allows firms in a distressed position or situation to review their financial health. This revision, in turn, yields a distinct form of board creditor protection from any legal implications during the process wherein a firm assesses the viability of their business and its chances of recovery.\r\nHow the new bill\u2019s effects on moratorium may be a stepping stone to improvement\r\n\r\n\r\nRegarding figures, the new moratorium revision seeks to provide companies in troubling finance waters around 20 working days worth of breathing space upon initial filing. This breathing room period, however, can also be extendable anywhere between an additional 20 working days or an entire year\u2014\u00a0which is primarily subject to the approval of creditors. \r\n\r\nAccording to R3\u2019s former president Duncan Swift, the former leader stated that \u201cThe moratorium is an opportunity for the company to assess the financial circumstances that it finds itself in.\u201d The professional also cleared up that the new moratorium isn\u2019t tied to a formal insolvency process\u2014 allowing more breathing room and flexibility for companies looking to assess their situation.\r\n\r\nAdditionally, Swift defended the new revisions and their effect on the practicality issues of UK insolvency: \u201cThis free-standing moratorium gives management more time to consider the options available and not to have \u2018pre-decide\u2019 whether to go in administration or into a company voluntary arrangements (CVA).\u201d\r\nA big-four take on the current revisions\r\n\r\nIn terms of a Big Four firm\u2019s take on the new CIG bill update and its underlying moratorium revisions, KPMG\u2019s global head of insolvency Blair Nimmo believes such an update is favourable. \r\nAccording to Nimmo, the moratorium process provides another viable option that insolvency practitioners can utilise to save a business with potential from financial demise. Attesting the claim that this revision leaves room to manoeuvre, the global head of insolvency further expressed her favour of the CIG bill\u2019s moratorium revision, stating: \r\n\r\n\u201cIt would be horrendous for businesses to fail simply because they didn\u2019t have a period to properly pursue different solutions, such as the sale or refinance of the businesses, whether it\u2019s a [renegotiation] of a contract, or new creditors, etc. It would be bad if a perfectly viable business fell because of lack of time.\u201d\r\nConclusion\r\nAs businesses continue to struggle with staying afloat amid the COVID-19 pandemic and are now forced to consider filing for insolvency, the new GIC bill seeks to provide a solution that works. With its renewed take on the moratorium process, the piece of legislation seeks to assist businesses as they get through this tough time.\r\n\r\nIf you\u2019re looking for more accountancy news in the UK, visit our site today!