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September 16, 2015 0

Recent statistics from the Insolvency Service show the number of enforcement outcomes obtained by the Insolvency Service continued to decrease, as did the director disqualifications.

The main reasons for this are:

  • the general decline in the number of corporate insolvencies
  • the reduced resources at the Insolvency Services following internal restructuring, training new staff and the government spending review.

The vast majority of the disqualifications are made under Section 6 of the Company Directors Disqualification Act – for unfit conduct in relation to an insolvent company. The most common allegation is the “unfair treatment of HMRC” – i.e. where a director took a conscious decision to pay other creditors and not pay HMRC.

The average length of a disqualification is 6 years.

How you can help your clients?

If you are aware of any clients who are consciously delaying their payments to HMRC for whatever reason, they are likely to appreciate your advice. We can help you:

  • guide them through their difficult times
  • consider all their available options – including insolvency
  • steer them away from doing anything that could result in them being disqualified as a director.

It is important to state that, in the event that a company does go into liquidation, we have a duty to report any suspected misconduct by directors to the Insolvency Service. So, let’s work together to help your clients avoid unnecessary problems.

For more information, just give us a call on 0161 907 4044.

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