Published: 19 October 2026
More than 500 company directors have been disqualified during the first six months of the 2026/27 financial year, according to newly updated figures from the Insolvency Service.
The latest Insolvency Service enforcement statistics, published on 19 October 2026, reveal that 542 directors were disqualified between April and September 2026, with an average disqualification period of 7.6 years.
The figures also show that allegations involving COVID-19 financial support schemes, including the Bounce Back Loan Scheme, continue to feature prominently in director disqualification cases.
For company directors experiencing financial difficulties, the statistics serve as an important reminder that responsibilities do not simply disappear when a business closes or enters liquidation.
However, it is equally important to understand that company insolvency does not automatically result in director disqualification.
What Do the Latest Insolvency Service Figures Show?
The newly published data provides an insight into director enforcement activity across Great Britain.
Between April and September 2026, the Insolvency Service recorded:
- 542 director disqualifications arising from its enforcement activity.
- An average disqualification period of 7.6 years.
- 483 disqualifications under Section 6 of the Company Directors Disqualification Act 1986.
- 305 Section 6 cases involving recorded allegations concerning COVID-19 financial support scheme abuse.
- 61 Section 6 cases involving allegations relating to unfair treatment of the Crown.
- 65 director disqualifications during September 2026 alone.
The figures also demonstrate that the Insolvency Service continues to investigate director conduct arising from companies that have experienced financial difficulties.
The statistics relate to specified enforcement activity under Sections 2, 6 and 8 of the Company Directors Disqualification Act 1986, rather than every director disqualification recorded across Great Britain.
They are drawn from live administrative systems and may be revised in subsequent publications.
Bounce Back Loan Investigations Remain Significant
One of the most notable findings is the continued number of director disqualification cases involving COVID-19 financial support schemes.
The Insolvency Service reports that 305 Section 6 disqualifications during the six-month period involved at least one recorded allegation relating to the misuse of COVID-19 financial support.
The average disqualification period for cases in this category was 9.3 years.
This does not mean that every director involved was disqualified solely because of a Bounce Back Loan, or that every allegation necessarily involved proven misuse of funds. Cases may include multiple allegations.
Nevertheless, the figures demonstrate that conduct associated with pandemic financial support remains an important area of investigation.
The Bounce Back Loan Scheme was introduced in 2020 to support businesses affected by the pandemic.
Many businesses legitimately obtained and used these loans but subsequently encountered financial difficulties.
Taking out a Bounce Back Loan and later entering liquidation does not, by itself, amount to misconduct.
Where concerns arise, the relevant questions may include how the funds were used, whether applications contained accurate information and whether transactions were conducted properly.
For example, concerns could arise where a director:
- Provided false information when applying for a loan.
- Used company funds for personal expenditure without proper justification.
- Transferred substantial sums to connected parties without an appropriate business purpose.
- Failed to maintain adequate records showing how funds were spent.
- Engaged in other conduct that may demonstrate unfitness to act as a company director.
Each case must be considered on its own facts.
What Happens to Directors When a Company Enters Liquidation?
There is a common misconception that directors will automatically be investigated, penalised or disqualified simply because their company has failed.
That is not the case.
Businesses can become insolvent for many reasons, including declining demand, increasing costs, unpaid invoices, lost contracts or circumstances beyond the directors’ control.
In a Creditors’ Voluntary Liquidation (CVL), the appointed liquidator has statutory responsibilities to review the company’s affairs and consider the conduct of its directors.
This normally involves reviewing matters such as:
- Company accounting records.
- Bank statements and significant transactions.
- Directors’ loan accounts.
- Dividends and payments to directors.
- Transactions involving connected parties.
- The company’s financial position before liquidation.
- Relevant circumstances surrounding the company’s insolvency.
The liquidator must submit the required director conduct information to the Insolvency Service.
However, the liquidator does not personally decide whether a director should be disqualified.
Where appropriate, the Insolvency Service can undertake further investigations and pursue disqualification proceedings or seek an undertaking.
What Can Lead to Director Disqualification?
Under the Company Directors Disqualification Act 1986, directors can face disqualification where their conduct meets the relevant statutory grounds.
In cases involving insolvent companies, Section 6 addresses conduct that makes an individual unfit to be concerned in the management of a company.
Examples of conduct that may give rise to concerns include:
Misuse of Company Funds
Company money should be used for legitimate company purposes, with transactions properly recorded and supported.
Unexplained withdrawals or personal expenditure may require investigation.
Inadequate Accounting Records
Directors are responsible for ensuring that adequate accounting records are maintained.
Poor records can make it difficult to establish the company’s financial position or understand what happened to its assets.
Serious record-keeping failures can themselves form part of director disqualification proceedings.
Transactions That Disadvantage Creditors
Payments to connected parties, transfers of assets or transactions undertaken when a company is experiencing financial difficulties may require further examination.
Not every such transaction is improper, but directors should be able to explain the commercial reasons and maintain supporting evidence.
Failure to Meet Statutory Obligations
Persistent failures concerning accounting, tax or other legal obligations can also form part of an assessment of director conduct.
The circumstances, seriousness and consequences of any failures will be relevant.
How Long Can a Director Be Disqualified For?
A director disqualification under Section 6 of the Company Directors Disqualification Act 1986 can last between 2 and 15 years.
During a disqualification period, an individual is generally prohibited from acting as a company director or being involved in the management of a company without court permission, subject to the applicable statutory restrictions.
The latest Insolvency Service figures show an average disqualification period of 7.6 years across the reported cases.
For Section 6 cases involving recorded COVID-19 financial support scheme allegations, the average was higher at 9.3 years.
Breaching a disqualification order or undertaking can have serious consequences, potentially including criminal liability and personal responsibility for certain company debts.
Disqualification is therefore a significant matter, rather than simply an administrative consequence of company failure.
Can Directors Be Disqualified After a Company Has Been Dissolved?
Yes.
Since December 2021, the Insolvency Service has had expanded powers to investigate the conduct of directors of dissolved companies.
This means that dissolving a company through Companies House does not necessarily prevent further scrutiny of director conduct.
Where a company has outstanding debts, directors should be particularly careful about assuming that an application for voluntary strike-off is an appropriate alternative to liquidation.
A company with unresolved liabilities may face objections to strike-off, and dissolution does not automatically eliminate potential claims or director responsibilities.
Directors should consider the company’s circumstances and obtain advice before deciding how to close it.
Does Entering Liquidation Mean a Director Has Done Something Wrong?
No.
This is an important distinction.
Company liquidation is a recognised legal process for dealing with a company that cannot continue trading or meet its liabilities.
Many directors who enter liquidation have acted responsibly and made genuine attempts to save their businesses.
A company may fail despite the directors’ best efforts.
The purpose of reviewing director conduct is to identify circumstances that may warrant further investigation, not to automatically penalise individuals because their business has become insolvent.
Where directors have maintained appropriate records, acted properly and cooperated with the liquidation process, those matters may assist in demonstrating the circumstances surrounding the company’s failure.
Liquidation can also allow an insolvent company’s affairs to be dealt with through a formal, structured process.
What Should Directors Do If Their Company Is Struggling?
If a company is experiencing serious financial difficulties, directors should take steps to understand its position rather than allowing debts to continue increasing without a realistic plan.
This may include:
- Reviewing the company’s current financial position and cash-flow forecasts.
- Establishing the full extent of outstanding liabilities.
- Ensuring accounting records and supporting documents are available.
- Reviewing directors’ loan accounts and significant transactions.
- Considering whether continued trading remains appropriate.
- Seeking independent professional advice about the available options.
Not every financially distressed business needs to enter liquidation.
Depending on the circumstances, refinancing, creditor arrangements or restructuring may be possible.
Where a company is insolvent and has no realistic prospect of recovery, Creditors’ Voluntary Liquidation may be the most appropriate route.
Taking advice early can help directors understand their responsibilities, assess the available options and avoid making an already difficult situation worse.
Free and Confidential Director Advice From DCA Business Recovery
At DCA Business Recovery, we regularly assist directors who are concerned about their company’s financial position and their personal responsibilities.
We understand that entering liquidation can be a difficult decision, particularly where directors have spent years building their businesses.
As a family-owned insolvency practice based in Southend-on-Sea, Essex, we provide straightforward, confidential advice to company directors throughout England and Wales.
Whether your company has outstanding Bounce Back Loan liabilities, HMRC arrears, unpaid creditors or general cash-flow difficulties, we can help you understand the options available.
We can also explain what happens during liquidation, what information directors are expected to provide and how the director conduct reporting process works.
Our initial advice is completely free and confidential, with no pressure or obligation to proceed.
If you are worried about your company’s debts or your responsibilities as a director, contact DCA Business Recovery for an initial conversation.
Telephone: 01702 344558
Website: www.dcabr.co.uk
