New crackdown on directors trying to avoid their company debts

The Insolvency Service is setting up a new team to tackle rogue directors who try to avoid paying their company debts.

Carly Davies, our Debt Recovery Manager, reports.

The Abusive Phoenixism Taskforce will have a staff of 50 people to investigate suspicious company insolvencies. It will have a budget of £25m.

The service’s Director of Investigation and Enforcement Services, Dave Magrath, said:  “This is welcome funding which will help the Insolvency Service tackle rogue directors who abuse the insolvency regime to get out of repaying their debts and keep assets which are not theirs. 

“It will allow us to disqualify more directors who are not fulfilling their roles responsibly, which will help us to support legitimate businesses and protect consumers.”

The funding will be used to investigate directors who deliberately liquidate or dissolve their companies to evade tax and write off their debts through practices such as abusive phoenixism. 

This is part of a wider government crackdown on crime in the marketplace 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 criminal cash 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 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.

If you would like more information about the issues raised in this article or any aspect of insolvency, debt collection or credit control please contact Carly on 01228 516666 or click here to send her an email.