Earlier action, faster recovery, tougher on fraud: Insolvency Service launches strategy
The Insolvency Service says it can drive even greater impact by helping people and businesses spot problems and find the right support earlier, and resolve it faster, before their situation escalates.
The agency’s new five-year strategy outlines a marked change in how it will work in future, making sure it spots risk sooner, guides people with financial or business problems towards the right options for help, and makes the whole system easier to navigate.
Better intelligence and closer working with Companies House and HMRC will also help to identify deliberate misconduct by directors sooner – including those abusing the rules around phoenix companies – focusing on those that cause the most harm, returning assets to creditors, and money to the economy.
There will also be a renewed focus on improving the insolvency system, working with the sector to make it easier for them to do their job while maintaining high standards.
Duncan Beach, chief executive officer for the Insolvency Service said: “Understandably, we are often seen as the organisation that steps in when things have already gone wrong. But by helping people and businesses make informed choices sooner and returning money and assets to productive use more quickly, we can make a greater contribution to economic confidence and growth.
“At the same time, we will continue to take firm action against those who abuse the system for personal gain – not least those behind abusive high street and phoenix companies. We will target the individuals and companies causing the greatest harm, protecting legitimate businesses and strengthening trust in the economy.
“This strategy is about acting earlier, moving faster and working more closely with partners across the system. I am asking directors, insolvency practitioners and our wider stakeholders to join us in creating the conditions for greater confidence, resilience and growth across the UK economy.”
Earlier, faster action to meet financial challenge
The Insolvency Service will give more people, directors and businesses access to trusted guidance before problems escalate, more customers will get the support they need, and people will have a clearer understanding of their options and obligations.
These changes will support faster debt relief and quicker redundancy payments, while helping viable businesses address financial distress at an earlier stage.
Stronger action against misconduct
The Insolvency Service will use better intelligence and closer working with Companies House, HMRC and law enforcement bodies to identify serious misconduct sooner, build cases more quickly and focus resources on organised economic crime and other conduct that causes the greatest harm.
Phoenix companies
Abusive phoenixism is when directors leave debts in one company and continue the same business through another, harming creditors, customers and legitimate businesses. By 2028, a larger taskforce of 50 people will use better data to detect high-risk cases sooner, intervene before more money is lost and recover assets where wrongdoing is proved.
Working with insolvency practitioners
The Insolvency Service will continue to work with insolvency practitioners to remove avoidable burdens while maintaining high standards. Their expertise will also inform work to help viable businesses address financial difficulty sooner.
Change is already under way
- The £90 Debt Relief Order fee has been removed and a new digital connection with debt advisers is reducing application time.
- The Director Information Hub now provides improved practical guidance.
- The Redundancy Payments Service supports first payments within 11 days for around 70,000 people each year.
- Updated practitioner protections, a review of support for smaller businesses and closer intelligence-sharing with Companies House will strengthen the wider system.