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.

The numbers:

• Of the 1,036 directors banned, 736 were disqualified for misusing Bounce Back Loans.

• The average length of a ban was eight years.

• The report also showed that there have been 131 bankruptcy restriction orders.

Why were Directors banned?

Misuse of the Bounceback 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.

What are the lessons for the rest of us?

For business owners, this report is a 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.

As we’ve advised throughout, make sure you retain clear records of any claims you made during the pandemic. It may have been five years ago now, but the implications of those days are still being felt, and having those records to hand if you ever need to provide them could make all the difference.