More than 800 directors banned for abusing Covid support scheme

Latest Insolvency Service figures have shown that a total of 831 company directors were banned in 2023-24 for Covid support scheme abuse, an increase in more than 80% on the previous year.

The average length of director disqualification for Covid misconduct in 2023-24 was almost 10 years

The Covid Bounce Back Loan Scheme was introduced at the start of the pandemic in 2020. It helped small and medium-sized businesses borrow between £2,000 and £50,000 at a low interest rate, guaranteed by the government.

Businesses were entitled to a single loan of up to 25% of their turnover under the scheme. Individuals could only use the loans for the economic benefit of the business and not for personal purposes.

Enforcement action taken against those that have abused the support schemes has ranged from companies being wound-up in court to criminal convictions, compensation orders and director disqualifications.

The Insolvency Service has successfully applied to have 1,430 directors banned for abusing Covid support schemes since it started investigating potential financial wrongdoing in this area in 2021.

Dean Beale, Chief Executive at the Insolvency Service, said “Tackling Bounce Back Loan misconduct is a key priority for the Insolvency Service and we are determined to use all our available powers to remove rogue company directors from the corporate arena.

It is important the Insolvency Service is taking such robust action to clamp down on directors who abused Covid support schemes and took from the public purse during the worst global pandemic for 100 years.

We have teams dedicated solely to investigating Bounce Back Loan misconduct that are committed to taking action against those who provided misleading information to receive money they were not entitled to.”

The Insolvency Service secured 459 director disqualifications for Covid support scheme abuse in 2022-23, and 140 in 2021-22, the first year after the Bounce Back Loan Scheme closed to new applicants.