This development is particularly relevant for any director who is facing, or worried about facing, an Insolvency Service Bounce Back Loan investigation.
2026 Update to original article
Updated Government Data (June 2025 release):
- 114,752 Bounce Back Loans were attached to companies that had dissolved or entered insolvent liquidation as at 31 March 2025.
- Of these, 73,977 are recorded as defaulted, 542 are still repaying, and 38,454 have been fully repaid.
Recent Enforcement Examples (Q2–Q4 2025):
- A director received a 12‑year director disqualification for obtaining two £45,000 BBLs by falsely declaring the second as the first.
- Multiple new BBL‑related disqualification cases have been reported in the last six months.
New Strategic Direction (Investigations & Enforcement Strategy 2026–2031):
The Insolvency Service has now published its long‑term enforcement strategy. These developments directly affect any director currently involved in, or at risk of, an Insolvency Service Bounce Back Loan investigation.
Original June 2025 article on Insolvency Service Bounce Back Loan investigation
The UK Government has announced that the Insolvency Service will take over the work of the National Investigation Service (NATIS), particularly its casework relating to COVID-19 Bounce Back Loan fraud. This transition follows a review of NATIS’s effectiveness in recovering taxpayer funds lost to fraud during the pandemic.
The Insolvency Service (IS) has a strong track record in tackling financial misconduct, having secured over 2,000 director disqualifications, 343 bankruptcy restrictions, and 54 criminal convictions relating to COVID-19 financial support scheme abuse. It has also helped recover more than £6 million in compensation. The move aims to accelerate fraud investigations and improve financial recoveries, ensuring that misused public funds are reclaimed more efficiently.
The transition will involve a review of ongoing cases over the next few weeks, determining which investigations and staff will transfer to the Insolvency Service. The government hopes this shift will “strengthen enforcement efforts” and provide better oversight of fraudulent claims made during the pandemic. Take a look at the Insolvency Service Covid Loans investigation data.
Our Comment – This is good news for investigating and punishing those who fraudulently applied for a BBL and/or went on to misuse the funds.
1.4m businesses drew down over £46 Billion in BBLs, whilst Lenders have flagged that about £1.9 Billion of BBLs were drawn down fraudulently (a likely under-estimate), so anything that can improve the recovery rates of this public money is a good thing, as NATIS had to date only secured 14 convictions for BBL fraud. Therefore, this is good news as Business and Trade Minister Gareth Thomas has said:
The “decision to transfer cases to the Insolvency Service will ensure lost funds from covid-era fraud are recovered more quickly and effectively, so they can be reinvested back into the economy and our public services, as part of our Plan for Change.
The Insolvency Service will be taking responsibility for NATIS casework, helping to conclude investigations to continue the important work to claw back money for the public.
The Insolvency Service has a proven track record tackling fraud and misconduct connected to covid support schemes since 2020 using its powers to investigate trading companies, prosecute criminal offences, disqualify directors and impose bankruptcy restrictions.”
2026 Update to Our Comment
The updated figures and enforcement strategy confirm that Insolvency Service Bounce Back Loan investigations will continue for several years.
We have a strong record in defending directors investigated for BBL fraud and misuse
Many directors have been investigated by the IS for alleged BBL fraud following the liquidation of their companies. As the figures show, the number of fraudulently drawn down BBLs was huge, but there were also many companies that went into liquidation, even after taking out a BBL, through no fault of their own. Despite their best efforts, the effects of COVID could not be overcome and the BBL had not been taken out fraudulently or misused.
In such cases, the receipt of notice of an IS investigation comes as a shock, with many directors appointing us to represent them at an early stage.
We have a strong track record in defending these directors, as these testimonials show:
- Bounce Back Loans (‘BBL’): NDP avoids a Director Disqualification sanction and a Compensation sanction for our Solicitor client.
- Another successful Bounce Back Loan (‘BBL’) Director Disqualification Investigation (‘DDI’) outcome for an NDP client.
- Testimonial: The Insolvency Service drop a Director Disqualification investigation into alleged £50,000 Bounce Back Loan (“BBL”) fraud.
Additional Recent NDP Case Studies – post June 2025
These recent outcomes demonstrate how NDP defends directors in the most challenging Insolvency Service Bounce Back Loan investigations.
- Clients facing Director Disqualification over Bounce Back Loan misuse allegation have Insolvency Service Investigation against them dropped
- Can a Director Avoid Director Disqualification Over a Bounce Back Loan Investigation? Yes!
Given the enormous scale of the fraud carried out in relation to BBLs, the task of persuading the IS to abandon a DDI in relation to BBL’s can be and often is more challenging than in other IS (non BBL) cases. The Director and his/her Solicitor must be prepared to persevere and be tenacious with their opposition, where appropriate and necessary, as the above case studies show.
Talk to us if threatened with Director Disqualification
If you or someone you know is facing an investigation into their conduct as a Director of a company either by the IS or a Law Firm (acting on behalf of the Secretary of State, NDP are more than happy to assist in dealing with matters in a swift and expedient manner. Please contact one of our Director Disqualification specialists, or call us on 0121 200 7040 for a free of charge initial chat.
Frequently Asked Questions
Do the Insolvency Service still investigate Bounce Back Loan misuse in 2026?
Yes. Enforcement remains active.
Can directors still face disqualification years after liquidation?
Yes.
Does a defaulted BBL automatically mean fraud?
No.
What should a director do if contacted by the Insolvency Service?
Seek specialist legal advice immediately.
