The government is set to take action to slam shut a loophole in insolvency rules frequently used by unscrupulous directors to escape investigation over failed companies.
Creditors have long complained that the Insolvency Service’s inability to open cases into dissolved companies has handed directors an opportunity to dodge accusations of malpractice.
Read more: Dissolution Loophole for Rogue Directors To Be Closed At Long Last
It’s a sad but well-documented fact that the most unscrupulous individuals will happily try to exploit any crisis for their own gain.
So it was in spring 2020, almost as soon as the first COVID-19 lockdown kicked into gear, that there was a wave of reports of pandemic-related email and phone scams, trying on everything from fraudulent PPE sales to ‘phishing’ for personal information through bogus medical registrations.
Read more: Warning Issued About Insolvency Debt Recovery Scam
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At Safe Collections, we’ve been banging the drum on the UK’s late payment culture for years, making the case over and over again that without the stick of meaningful enforcement, there is little incentive for large companies to stop holding smaller suppliers over a barrel when it comes to payments.
Finally, it seems like the message may have gotten through to the government, although on account of the time it has taken, we can only conclude they are listening reluctantly.
Read more: Still Time to Have Your Voice Heard On Late Payment Enforcement
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When it comes to flexing its censorious muscles over what you can and cannot register as a company name in the UK, it appears that Companies House may have fallen behind the times.
The executive agency in charge of incorporating and dissolving registered commercial entities has long been known as a bastion of decorum and decency. Every year, the government body rejects a few dozen applications to set up companies on the grounds that the requested names are potentially offensive.
Read more: What’s in a Company Name? More Than You Might Have Bargained For…
You couldn’t accuse the UK government of wishing a second national lockdown. In fact, according to critics, the Johnson-led administration is guilty of trying to fend off the inevitable for too long, failing to take the decisive action that just might have nipped the ‘second wave’ in the bud back in September when it was clear cases were rising again.
The government’s reasoning is no secret. It wanted to do everything it possibly could to keep the already battered economy open, fearing the long-term consequences of another significant shut down in trade and commerce.
And yet here we are. After it became clear last week that the regional approach to COVID-19 restrictions wasn’t going to be enough, that transmission had galloped past the worst-case working assumptions, and that the NHS was already close to being overwhelmed in some areas, No 10 felt it had no other choice. Another U-turn, another lockdown, another month (we hope) of all but essential customer-facing businesses being shut.
Read more: Fears of a ‘Tsunami of Insolvencies’ as Second Lockdown Bites
It is not likely to be news to any business owner that the COVID-19 pandemic has seen late payments soar.
The fallout from the crisis has seen revenues across the economy plummet, with the Office for National Statistics (ONS) reporting a 20.4% slump in GDP in Q2 of this year while the country was in full lockdown.
