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The Insolvency Service has published its latest enforcement outcomes report for 2024-25, and it carries an important message for business owners. More than 1,000 company directors were disqualified over the year, with the majority of cases linked to abuse of Covid support loans.
Of the 1,036 directors banned, 736 were disqualified for misusing Bounce Back Loans. The average length of ban was eight years. The report also showed that there have been 131 bankruptcy restriction orders.
Misuse of the Bounce Back Loan Scheme - such as inflating turnover to claim more money or using funds for non-business purposes - has been a key focus of enforcement efforts.
Other reasons for disqualification included failing to maintain adequate accounting records, not paying tax or VAT owed to HMRC, and acting as a director while already banned.
When a director is disqualified, they are legally prohibited from managing, forming, or promoting any UK company, or any overseas company with links to the UK. This can last anywhere up to 15 years. Breaking a disqualification order can result in a fine or even a prison sentence.
Are there any take-home lessons?
For business owners, this report is a timely reminder of the responsibilities that come with being a director. Ensuring proper record-keeping, staying on top of taxes, and using financial support appropriately are not just good business practices - they’re legal obligations.
If you’re unsure about any aspect of your duties as a director, it’s always worth seeking advice early. A proactive approach can help avoid problems down the line and protect both your business and your reputation.
To view the Insolvency Service’s outcome report, see: https://www.gov.uk/government/publications/insolvency-service-enforcement-outcomes-management-information
The information provided in this blog is for general informational purposes only and should not be considered professional advice. As far as we are aware, the content is accurate at time of publication. Torgersens assumes no responsibility for errors or omissions in the content or for any actions taken based on the information provided.
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