In an effort to alleviate the impact of COVID-19 on UK businesses and encourage the supply of essential goods and services during the pandemic, the UK Government announced plans earlier this year to temporarily suspend wrongful trading laws and to fast track proposed permanent reforms to the existing insolvency regime (these reforms were developed in 2016 and consulted on in 2018).

The economic outcome from the coronavirus (COVID-19) pandemic is still uncertain but is likely to remain catastrophic in many respects. Of late popular name brands and companies have filed for bankruptcy as stay-at-home orders and social distancing requirements remain largely in effect. Morgan Lewis tax lawyers alert those considering bankruptcy or restructuring to various tax traps that may arise during these processes.