Insolvency Service cracks down on Covid loan fraud
The UK’s Insolvency Service has secured 141 director disqualifications related to government-backed Covid-19 financial support schemes and is continuing to investigate a “significant number of cases where there has been misconduct”.
According to figures released in the Insolvency Service’s annual report for the 2021-22 financial year, there were also 58 bankruptcy and debt relief restrictions in relation to schemes, including Bounce Back Loans.
The average length of director disqualifications was seven years and two months and in 16 per cent of the cases, the period was more than 10 years.
Overall, the Insolvency Service removed 802 unfit directors from the marketplace and won 119 criminal convictions.
The number of investigations into live companies has increased from 143 last year to 167 this year, with a total of 304 bankruptcy restriction orders secured.
Read more: Insolvency Service shuts down two firms fraudulently claiming Covid support
Chief executive Dean Beale said he expects to see an increase in insolvencies next year as government support measures rolled out during the pandemic come to an end and the insolvency regime returns to normal operations.
“Over the last two years we have seen decreases in business insolvencies, likely to be the result of government support measures during the pandemic and widespread creditor forbearance as businesses faced unprecedented trading challenges,” he said.
“The number of cases handled by Official Receivers fell by 27 per cent and the number of claims to the Redundancy Payments Service also dropped from 96,219 last year to 44,895 this year. Next year we expect to see an increase in company insolvencies…”
Read more: UK tipped to return to pre-pandemic insolvency levels
Over the period, the Insolvency Service also said it recovered more than 35,000 separate assets in bankruptcy and liquidation cases, with a total value of £49m.
“Overall, the Agency produced a solid performance in 2021-22 and I am very proud of how our people delivered for our customers and other stakeholders through such difficult times,” Beale added.
Read more: Businesses warned to act quickly as insolvency support comes to an end