The latest data from the Insolvency Service shows us that the established trends from 2017 for director disqualification look likely to stay on par with those from recent previous months.

Over the last three years, approximately 1,200 directors have been disqualified each year, and the year-to-date data shows that 2016/2017 will also be in that region.

If we put this in the context of UK insolvency figures, it means that around 7% of all company insolvencies lead to a director disqualification.

What do directors get disqualified for?

Ultimately, as company director, you can be disqualified for not meeting your ‘legal responsibilities’.

The Insolvency Service has a duty to investigate all allegations of unfit conduct. This can include:

  • allowing a company to continue trading when it can’t pay its debts
  • not keeping proper company accounting records
  • not sending accounts and returns to Companies House
  • not paying tax owed by the company
  • using company money or assets for personal benefit

In the article, ‘How worried should I be about director disqualification‘, we discuss some of the most common reasons directors get disqualified in more detail: just over half of the allegations are in relation to unfair treatment of the crown. However, increasingly, there are also director disqualifications that having nothing to do with non-payment of taxes.

How long do directors get disqualified for?

Whilst the majority of bans last for around two to five years, the numbers of this length of ban have been decreasing in recent years, and the numbers of longer term bans have been ever-so-slightly increasing.

Recent Insolvency changes have given the Insolvency Service a longer timespan – up to three years – to investigate directors’ conduct, which broadens the scope of its abilities to prepare evidence. The changes also mean that disqualification bares a greater financial penalty with compensation to the estate now being attached to disqualification orders.

What to do if you are concerned about director disqualification.

Contact one of our BusinessRescueExperts directly. We understand the process from both sides of the coin – as ‘poacher and gamekeeper’ and have significant experience and skill in negotiating on your behalf.