Government agency The Insolvency Service plays a crucial role in providing essential services to the public and businesses. The agency's work is important to the proper functioning of markets, and the economy in general — it supports thousands of people each year who are in financial difficulty. Our investigation and legal teams will be at Civil Service Live in Edinburgh (15 June) and London (5-6 July). Come and visit our stand to learn how the agency collaborates with other departments and enforcement agencies to deliver the government's priorities in preventing corporate and financial wrongdoing and upholding the insolvency framework's integrity.
Speak with our teams at Civil Service Live and you will discover that as an agency, The Insolvency Service has a variety of roles across a wide variety of professions. In addition to legal and investigative functions, we have insolvency specialists, project management, HR, finance and commercial, communications, policy, and digital roles.
Tackling financial wrongdoing
The Insolvency Service has powers to investigate companies or individuals when involved in insolvency proceedings, as well as directors who abuse the company dissolution process or if there has been a complaint.
All individuals who are made bankrupt are obliged to disclose their assets so that their trustee in bankruptcy can distribute available funds to their creditors. The recent Boris Becker case demonstrates the serious consequences of failing to meet these obligations.
Becker was made bankrupt on 21 June 2017 and concealed and removed significant assets from the Official Receiver and his Trustee in Bankruptcy. Assets concealed included €426,930.90, which was transferred to several third parties, a property in Leiman, Germany, and 75,000 shares in Breaking Data Corp.
Becker's failure to disclose all his assets led to his discharge from bankruptcy being suspended indefinitely. He is now serving a prison sentence of two years and six months.
How does it work with businesses? We investigate the conduct of directors of companies subject to formal insolvency proceedings, or that have been dissolved. When our investigation uncovers that a company director has not followed their legal responsibilities and it is in the public interest to take action, the agency will write to them explaining the misconduct and that we are intending to start disqualification proceedings. The director has the opportunity to voluntarily disqualify themselves otherwise the case will proceed to court.
Directors involved in disqualification proceedings could be banned from being a director of a limited company or even involved in running a company for anywhere between two and 15 years.
In addition to being subject to a range of disqualification restrictions, their details will be published online on GOV.UK and if they are found to breach their restrictions, they could be subject to criminal proceedings.
Some of the substantial bans the agency has reported on include a director involved in a multimillion-pound VAT fraud, a husband and wife team who duped small businesses to sponsor unnecessary educational material and a director who illegally transferred £2.5m worth of property assets to a family member.
Moving towards rehabilitation
In the 2020-2021 period, 981 directors were disqualified for corporate misconduct. The agency achieved 143 successful criminal prosecutions and undertook 146 investigations into solvent companies. This outcome amounts to a huge undertaking for our team of dedicated legal, investigation and enforcement teams.
Through The Insolvency Service's 5-year strategy, we're starting to look at how the agency can work to help prevent insolvencies and support directors through education and guidance. For example, we are developing a dedicated online educational resource that provides company directors with clear, accessible advice and signposts them to further support.
The online platform will also include a new company health check tool that will help directors by flagging the early indicators of possible insolvency. To help directors of companies which have failed, we will develop training materials to support them so they learn from the experience.
Come and meet the team at Civil Service Live in Edinburgh and London to learn more about our work to tackle financial wrongdoing and what it's like to work at the Insolvency Service.