The insolvency trade body, R3, has called for greater clarity surrounding the issue of “rent due” in insolvency, following the latest rent quarter day.
During the last rent quarter day, on June 24th 2012, businesses were required to pay three-months rent in advance for commercial properties – and it is around that time that insolvencies increase, as businesses struggle financially – it has also been claimed that rent quarter day presents issues for insolvency practitioners advising such businesses.
According to R3, the “rent quarter day” is a hefty bill for businesses to pay, especially at a time when insolvency on the UK High Streets has already seen over 20,000 job losses during 2012, and they have now called for clarity on the matter.
Joanne Rumley from R3, said: “Quarter day rents will always present a challenge to insolvency practitioners advising struggling retailers.
“R3 is asking for greater clarity and guidance around the issue of ‘rent due’ in insolvency, whether it counts as an expense of the administration and over what period.”
For businesses who are concerned that after the “rent quarter” bill they may experience financial difficulties over the next twelve months; or for businesses who are currently struggling, Milsted Langdon can assist.
Our insolvency practitioners are able to offer advice and guidance surrounding various financial solutions, which are designed to help businesses and entrepreneurs from the insolvency route.
Tim Close is an accountant specialising in business insolvency, debt recovery and business rescue.