Temporary measures brought in to support businesses in the UK from insolvency during the pandemic will be phased out from 1 October, the government has confirmed.

Businesses facing financial distress – as a result of the pandemic – were given extra protection from creditor action in June last year, as part of the Corporate Insolvency and Governance Act 2020.

From 1 October, those protections are being lifted and new "targeted measures" will be introduced to support small businesses and commercial tenants.

The new legislation will protect businesses from creditors insisting on repayment of relatively small debts, by temporarily raising the current debt threshold for a winding-up petition to £10,000 or more.

New measures will also require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding-up action.

The new measures are set to be in force until at least 31 March 2022 and will cover England, Scotland and Wales. Northern Ireland will implement similar legislation to mirror these measures.

Business Minister Lord Callanan said: "The success of our vaccine rollout means we are seeing life and the economy returning to normal with a strong rebound, and the time is right to lift the insolvency restrictions that were needed during the pandemic.

"At the same time, we know many smaller businesses are rebuilding their balance sheets and reserves, and some will need more time to get back on their feet. These new measures protections will help them to do that."