Chancellor Rachel Reeves confirmed on 26 November that the Insolvency Service will receive £25 million over five years to strengthen enforcement against rogue directors. The funding establishes a 50‑strong Abusive Phoenixism Taskforce to investigate suspicious insolvencies and refer cases for director bans.
According to the agency, the uplift will target behaviour where companies are deliberately liquidated or dissolved to evade tax and write off debts, while insiders retain assets. The stated aim is to increase disqualification outcomes to support compliant firms and protect consumers.
Government guidance describes phoenixing as trading through successive companies while leaving liabilities unpaid; it is considered abusive when used deliberately to avoid creditors. Lawful restarts remain permitted where directors are not bankrupt or disqualified and comply with insolvency law.
The fiscal risk is material. HMRC now estimates tax losses linked to phoenixing at £836 million in 2022–23-around one‑fifth of uncollected tax for that year and 45% higher than earlier estimates-prompting tighter joint enforcement with the Insolvency Service and Companies House.
Recent enforcement activity provides a base to build on. In 2024–25 the Insolvency Service secured more than 1,000 director disqualifications, and April’s statistics show most bans related to Covid loan abuse with average disqualifications around eight years. Over the same year the agency obtained 77 criminal convictions and 41 public‑interest wind‑ups.
The funding aligns with the Investigations and Enforcement Strategy 2026–31, published on 16 July, which commits the Service to a larger role in tackling economic crime and to being recognised as the UK authority on corporate and insolvency standards.
HM Treasury has set out complementary measures. In March, the Exchequer Secretary outlined a joint plan with HMRC, Companies House and the Insolvency Service to curb phoenixing-doubling the value of director liability notices in 2025/26, increasing HMRC securities to protect more tax by 2026/27, and targeting 100 additional disqualifications in 2026/27.
For directors, the legal framework is clear. Under the Company Directors Disqualification Act 1986, bans for unfit conduct can last up to 15 years and may reach those who influence misconduct from behind the scenes. Since 2021, the Insolvency Service can also act against former directors of companies dissolved without formal insolvency.
For creditors, courts can order payments from disqualified directors under sections 15A–15C CDDA, either to specified creditors or as a contribution to the insolvent estate. Introduced in 2015, these compensation orders and undertakings sit alongside disqualification and public‑interest winding up as routes to address losses where misconduct is proven.