The word ‘rogue’ has been applied to this year’s Autumn Budget for many reasons. But for our friends at the Insolvency Service it’s all about directors sailing close to the wind – and new funding from the Chancellor to disqualify them.
Last week Rachel Reeves announced £25m of investment over the next five years to enable the Insolvency Service to investigate and take action against errant company directors, specifically those who abuse the insolvency regime to get out of repaying their debts and keep assets which are not theirs. A new Abusive Phoenixism Taskforce will be staffed by 50 people investigating suspicious company insolvencies.
We have reported many times on phoenixism, continuing the business of a dissolved company but without the debts of the former entity. The Insolvency Service has welcomed the funding, which it says will allow it to disqualify more directors who are not fulfilling their roles responsibly, and will help it to support legitimate businesses and protect consumers. The funding will be used to target directors who deliberately liquidate or dissolve their companies to evade tax and write off other debts through practices such as phoenixism.
It’s part of a wider government crackdown on crime in small and medium businesses that is already underway, including expanding right to work checks to the gig economy, sub-contracted and self-employed workers, a crackdown on shops selling counterfeit tobacco and vapes, and seizing cash laundered by criminals so that it can be reinvested into communities.
In 2024-25, the Insolvency Service secured 77 criminal convictions, more than 1,000 director disqualifications, and wound up 41 companies in the public interest. The agency also launched a new five-year investigation and enforcement strategy in July 2025, with plans to play a more prominent role in the fight against economic crime and be recognised as the UK’s leading authority in enforcing corporate and insolvency standards.
HMRC recently estimated that in the 2022-24 tax year it had lost £836m as a result of “small business phoenixing”. The figure is more than 40% higher than earlier estimates and represents around one-fifth of all uncollected tax for that year.
Given those figures, there may be a good return on the government’s £25m investment, if we assume that 50 new team members are enough to recover funds from bringing dodgy directors to book. It may only be enough to clear the backlog of disqualification cases already on the Insolvency Service’s radar.
Insolvency Practitioners such as Buchler Phillips might argue that there is lower hanging fruit for the government from encouraging HMRC to chase business tax debts earlier, where companies haven’t negotiated a ‘time to pay’ arrangement and are refusing to cooperate.
Those wanting to stay on the right side of the law when closing businesses and opening new, related ones in short order should take professional insolvency advice throughout the process. Buchler Phillips welcomes exploratory discussions with directors aiming to migrate their former businesses to new incorporated entities.
This article is written by Toby Horne, analyst at Buchler Phillips, an independent boutique firm, with an impeccable Mayfair London heritage, specialising in corporate recovery, turnaround, restructuring and insolvency.