The Insolvency Service recorded hundreds of director disqualifications involving COVID-19 financial support scheme allegations during 2025/26, several years after the original support measures were introduced.
For directors receiving an investigation letter or questionnaire, this does not automatically mean that wrongdoing has occurred or that disqualification will follow. Insolvency Service enquiries are a recognised part of the regulatory process following company insolvency or dissolution. Directors have an opportunity to explain their decisions, provide relevant evidence and respond to the allegations made against them.
An investigation will usually follow concerns about the company’s eligibility for financial support, the information provided when funding was obtained or how the money was subsequently used. What happens next depends on the evidence, the director’s explanation and whether the Insolvency Service considers further action to be in the public interest.
What do the latest COVID-19 director disqualification figures show?
The Insolvency Service’s enforcement outcomes for 2025/26 record 1,158 director disqualifications in Great Britain. The average disqualification period was 8.1 years.
- Of the total, 1,044 disqualifications were recorded under section 6 of the Company Directors Disqualification Act 1986.
- The Insolvency Service states that 773 of those cases involved at least one allegation relating to COVID-19 financial support scheme abuse.
- This represents approximately 74 per cent of the section 6 total.
The average disqualification period in the COVID-19-related cases was 9.4 years. This was longer than the overall average of 8.1 years across all director disqualifications recorded during the reporting period.
March 2026 produced the highest monthly number of section 6 outcomes involving COVID-19 support scheme allegations, with 95 recorded cases. The publication does not explain why more outcomes were recorded in that month or why particular cases concluded during 2025/26.
These figures show that historic COVID-19 and bounce back loan support arrangements continue to feature prominently in director disqualification enforcement. They do not establish that every director involved deliberately misused public funds.
Why are historic COVID-19 cases still producing enforcement outcomes?
The publication reports when disqualification outcomes were recorded. It does not state when the underlying loan application, company failure or alleged conduct occurred.
It also does not explain why individual investigations took a particular length of time. It would therefore be unsafe to assume that the figures reflect delays, new investigation policies or a sudden increase in suspected misconduct.
A director disqualification investigation can involve an examination of company accounts, bank statements, loan documentation, correspondence and evidence about the company’s trading position. The director may be asked to complete a questionnaire or explain particular transactions before the Insolvency Service decides whether further action is appropriate.
The official government guidance confirms that disqualification is a civil rather than criminal process. A court may make a disqualification order, or a director may offer a disqualification undertaking which has the same practical effect. The maximum period of disqualification is 15 years.
Our director disqualification guide explains the stages that may follow an initial investigation, including questionnaires, pre-action correspondence, section 16 notice and possible court proceedings.
The important distinction is between an investigation and an outcome. An enquiry means that the Insolvency Service is examining the circumstances. It does not, by itself, determine that the director is unfit.
Does a recorded COVID-19 allegation mean misconduct has been proved?
No. The Insolvency Service publication records cases in which at least one relevant allegation appeared on its administrative systems.
- The source expressly states that multiple allegations may be recorded in a single case. It does not provide the evidence underlying each allegation or say whether every allegation was admitted, proved at a contested hearing or included in an agreed undertaking.
- This distinction matters. The 773 figure should not be described as 773 proven cases of fraud. The category may cover different forms of alleged conduct and different levels of seriousness.
Potential areas of scrutiny may include whether the company met the eligibility requirements for the relevant support, whether information provided in an application was accurate and whether funds were used for the economic benefit of the business. The evidence and explanation will be different in every case.
A mistake, incomplete record or disagreement about the company’s financial position does not automatically establish dishonesty. Equally, a director cannot assume that an informal or poorly documented decision will be accepted without explanation.
Directors facing Bounce Back Loan director disqualification allegations should identify precisely what is being alleged rather than responding to a general accusation of loan misuse.
What other personal risks can arise from a COVID-19 support investigation?
Director disqualification is not the only possible enforcement outcome recorded in the 2025/26 figures.
- In England and Wales, the Insolvency Service recorded 93 bankruptcy and debt relief restrictions. Of these, 55 involved allegations relating to COVID-19 financial support scheme abuse. The average restriction period for those cases was 9.2 years.
- The publication also records 81 convicted defendants following criminal investigations and charges brought by the Insolvency Service in Great Britain. Thirty-one of those defendants were connected with COVID-19 financial support scheme abuse. The source does not state that every convicted defendant was a company director.
These figures should not be used to suggest that a civil disqualification investigation will automatically become a criminal prosecution. Disqualification proceedings are civil proceedings, and criminal liability requires a separate investigation and process.
There may also be a risk of financial recovery. Government guidance states that compensation may be sought where the conduct for which a person has been disqualified caused direct loss to creditors and the loss has not been sufficiently repaid through the insolvency process.
A director considering a disqualification undertaking should therefore understand not only the proposed length of the ban, but also the wording of the misconduct allegations and whether they could be relied upon in later compensation or recovery proceedings.
What should a director do if contacted about COVID-19 financial support?
A director should begin by reading the correspondence carefully and identifying the precise conduct, transaction and period under investigation.
Relevant records should be preserved. Depending on the allegation, these may include
- the original support application,
- turnover calculations,
- bank statements,
- management accounts,
- board discussions,
- correspondence with accountants; and
- evidence showing how the funds were applied.
The director’s response should be accurate and supported by the available documents. Where the records are incomplete or the director cannot remember a particular detail, that should be stated honestly rather than filled with assumptions.
It is also important to distinguish between decisions made by the director personally, decisions made collectively by the board and matters dealt with by employees or professional advisers. Advice received from an accountant or another professional may be relevant, but it does not automatically remove a director’s own responsibilities.
The Insolvency Service normally seeks an explanation before deciding whether to pursue a disqualification order. Directors can respond to the allegations and provide evidence about why particular decisions were made. Proceedings may be discontinued where they are no longer considered to be in the public interest.
Our guidance on dealing with early enquiries from the Insolvency Service explains how questionnaires and information requests may later form part of the evidence in disqualification proceedings.
Receiving an enquiry can be unsettling, but it does not remove the director’s ability to present a properly evidenced account. Early review of the allegations and company records can help ensure that the response is clear, consistent and limited to what the evidence supports.
Francis Wilks & Jones advises directors in England and Wales on Insolvency Service investigations, COVID-19 financial support allegations and director disqualification proceedings. We can review the correspondence, identify the issues requiring a response and help directors understand the civil and financial risks arising from the investigation.
