The moratorium on insolvency action saved around 1,800 businesses during lockdown, according to new research carried out by UHY Hacker Young.
Between 1 April to 30 November 2020, less than 99 businesses were closed due to a petition from HMRC.
This figure represents a 95% drop in closures from HMRC as the body is unable to take insolvency action against businesses during the pandemic.
Peter Kubik, a partner at UHY Hacker Young said: “Many businesses that would otherwise have been wound up by HMRC during the year of lockdown have survived purely thanks to the moratorium.”
“The moratorium may have spared thousands of businesses but it’s not a magic bullet. Once it comes to an end, many will still be in a precarious financial position.”
He added: “HMRC must continue to be patient and refrain from taking aggressive action once the moratorium ends. Instead, it should focus on working with these businesses to come up with payment plans.”
“Time to pay arrangements would allow businesses to spread their debt over a longer period, helping cash flow and enabling them to pay other outgoings.”