The Channel logo

News

By | Kat Hall 1st October 2015 11:01

IT supplier? Got a customer who won't pay? Dob them in to the Insolvency Service

You'll have to keep supplying, but this way you will get paid

From today IT suppliers are encouraged to begin shopping their failing customers into the Insolvency Service, under a new order coming into force that will guarantee payment to providers of companies entering administration.

Under Insolvency (Protection of Essential Supplies) Order 2015, the rules have been expanded - following a consultation period - to include technology services to count as "essential supplies".

That means once a customer enters administration firms will be forced to continue supplying them. However, under the rules they will also be guaranteed payment from the insolvency practitioner.

Any outstanding payments for services up to the point of the company entering administration are not guaranteed.

Previously just gas, electricity and water services were counted as "essential supplies."

Nick Pike, partner in the restructuring department at law firm Pinsent Masons, said the new rules reflect the fact that technology services are now viewed as being as important as utility services.

"Effectively it means IT firms are able to seek a personal guarantee from the insolvency practitioner. However, they will not be able to insist on new terms of trade," he said.

The intention of the order is to prevent failing businesses form being cut off from "essential supplies" when insolvency practitioners are trying to flog them off to potential buyers.

The order defines IT supplies as communications services, computer hardware and software, website hosting, data storage and processing, IT technical assistance and services enabling the making of payments. ®

comment icon Read 16 comments on this article or post a comment alert Send corrections

Opinion

Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella
Stranded_ships

Chris Mellor

Thousands of layoffs announced as spinning rust enters its death spiral

Features

Locker room jocks photo via Shutterstock
Best locker-room strategy: Avoid emulating AWS directly
STRASBOURG, JUNE 29, 2016: The seat of the European Parliament. by Marco Aprile for shutterstock. EDITORIAL USE ONLY
Plan b, image via Shutterstock
EU workers, new markets: post-Brexit pressure on May & Co
Tough question, pic via Shutterstock