More than half of the 3,280 company directors banned in Great Britain since 2023 were caught abusing Covid-19 financial support, new figures reveal, proof that the pandemic’s emergency lending schemes are still claiming casualties five years on.
Data released by the Insolvency Service, obtained through Freedom of Information requests by law firm Weightmans, shows that 1,683 disqualifications, 55 per cent of the total, related to the misuse of government-backed financial assistance during the pandemic.
Disqualifications peaked at 1,222 in 2023/24 and have eased since, with 1,021 recorded so far in 2025/26. The overwhelming majority, 3,054, were issued under Section 6 of the Company Directors Disqualification Act, which covers unfit conduct by directors of insolvent or dissolved companies. A further 344 bankruptcy and debt relief restriction cases were recorded over the same period.
The findings echo earlier official figures showing that more than half of directors struck off in the 15 months to mid-2023 were linked to alleged fraud or abuse of Covid loan schemes.
While the number of disqualifications is falling, the money being clawed back is heading in the opposite direction. Over the last three years the Insolvency Service has recovered more than £1.8 million in compensation from disqualified directors. Over half of that total (52 per cent) came in the last year alone, when 123 people were ordered to repay nearly £974,000.
The number of compensation orders and undertakings granted rose 32 per cent in the last year. Under Section 15A of the CDDA, a court can require a disqualified director to compensate creditors of the insolvent company who lost out as a result of the director’s misconduct.
Enforcement is unlikely to soften. The Insolvency Service has just launched an AI-powered taskforce to pursue rogue directors behind an estimated £800 million “phoenixism” problem.
Construction saw more directors banned than any other sector, with 536 disqualifications over three years. That will surprise few. The industry also recorded more corporate insolvencies than any other sector in 2025, as rising material costs, supply chain disruption and cash flow pressure squeezed margins.
Accommodation and food service activities followed with 487 disqualifications, with wholesale and retail third on 464. Administrative and support services and professional, scientific and technical activities rounded out the top five, and were the only two categories in it to rise year on year, each up 23 per cent.
London recorded the highest regional total at 820, nearly double the North West’s 440. Wales had the fewest bans at just 48, but the sharpest rise, up 175 per cent in 12 months. Eight of the 11 regions and nations saw disqualifications increase in the last year.
A disqualification order bans an individual, including de facto, shadow and non-executive directors, from acting as a director or being involved in forming, promoting or managing a UK company for up to 15 years. It can also bar them from charity trusteeships and some school governance roles. A disqualified person may still trade as a sole trader, act as a company secretary or hold shares, provided they take no part in company management.
Shevy Narendra of Weightmans said: “The findings show an increasing amount of compensation when it comes to directors’ dismissals, with over £1.8 million recovered, even with the steady drop in the number of cases, according to The Insolvency Service.”
Directors can apply to court for permission to remain involved in the management of a specific company, but Narendra warned: “Timing is important when considering a voluntary disqualification undertaking or a Section 17 application, and specialist legal advice is recommended to ensure the best outcome and minimal disruption to current directorships.”
For owners of struggling firms, the message is blunt. The pandemic support ledger has not been closed, and the Insolvency Service is still working through it.
