In the latest enforcement report from the Insolvency Service, the agency disqualified over 1,000 directors in the 2024-25 period. 736 of those disqualifications related to the misuse of Covid loans. These disqualifications reflect the agency’s ongoing efforts to tackle misconduct, including fraudulently securing Bounce Back Loans (BBLs) intended to support businesses during the pandemic.

The report, published on 14 April 2025, reveals that directors who misused these loans faced an average disqualification period of eight years. In addition, 131 bankruptcy restriction orders (BROs) were imposed, with 87 linked to BBL misuse.

The enforcement actions emphasise the serious consequences for directors who fail to uphold legal business practices. Common reasons for disqualification include failing to maintain proper accounting records, not paying owed taxes, and fraudulently securing Covid loans.

Directors disqualified under these terms face a ban from serving as directors for up to 15 years, during which they cannot form, promote, or manage companies. Any breach of this disqualification can result in fines or prison sentences of up to two years.

In an environment where every business decision counts this is a wake-up call for business owners across the country. Understanding the intricacies of insolvency law and staying on top of enforcement actions can help you avoid costly mistakes that could jeopardise your business and your future.