The number of company directors disqualified by the Insolvency Service fell by 24% in the last year, from 1,280 the year before to 972 in 2020/21, says UHY Hacker Young
Failure to investigate directors guilty of financial misconduct could result in a huge loss to the taxpayer through defaults by those directors on Coronavirus Business Interruption Loans (CBILS) and Bounce Back Loans (BBLS).
Speculation has mounted that director fraud during the pandemic could amount to billions of pounds, with under pressure directors taking out government-backed CBILS and BBLS with no intention of paying them back.
The fall in disqualifications of directors last year is an unusual result given the scale of last year’s record-breaking recession in 2020.
Peter Kubik, partner at UHY Hacker Young explains that the low number of directors being disqualified in the last year is partly due to government measures to artificially reduce the number of corporate insolvencies. Misconduct by directors is often only discovered once a business has become insolvent and an insolvency practitioner looks at what has happened.
