Asset Solutions March 2022 Round-Up: The UK’s Latest Bankruptcy and Insolvency News & Statistics

tax scammers mousetrap

From fraudulent directors to phoney Self-Assessment tax refunds that should be avoided, this blog covers the most important bankruptcy and insolvency news currently emerging from the bankruptcy and insolvency world. It will also discuss the latest monthly insolvency statistics released on 15 March.

HMRC Issues Warning as Scammers Target Personal Tax Accounts

HMRC has urged individuals to not share any personal information via a bogus Self-Assessment tax refund proposition that is currently being circulated by fraudsters. By supplying such information, individuals place themselves at risk of involving themselves in tax fraud.

Scammers are currently attempting to get hold of individuals’ Customer Gateway logins and other personal details. In theory, this information enables them to hijack personal tax accounts and submit bogus tax refund claims before pocketing the repayment.

How Does It Work?

The initial contact between fraudsters and their targets is primarily made on social media platforms. They ask people to “borrow” their identity in return for a “risk-free” cut of the tax refund.

Simon Cubitt, Head of Cybercrime at HMRC, has come out and said: “People need to think extremely carefully before they involve themselves in an arrangement like this, because if something looks too good to be true, then it almost certainly is.”

He continued: “Those who get involved risk becoming the victim of blackmail, threats of violence and wider abuse of their personal information, as criminals seek to exploit them further. I urge anyone who may be aware of these dishonest attempts to recruit individuals into criminality, to report it us by searching ‘Report Fraud HMRC’ on GOV.UK and completing our online form.”

Discover more on the current issues faced by HMRC by reading: HMRC looking to recover unpaid Covid taxes

Hefty Ban for Wolverhampton Director Who Fraudulently Claimed COVID Financial Support

COVID-19 financial support has offered businesses across the UK a lifeline during the pandemic. Unfortunately, it has also opened the door for fraudulent activity for those who want to take advantage of this lifeline. 

A director from Wolverhampton has received a 9-year ban from The Insolvency Service for deliberately exaggerating company turnover to secure a £50,000 Bounce Back Loan. The Bounce Back Loan Scheme was designed to allow businesses to access finances more quickly during the pandemic. £50,000 is the maximum loan available.

Inderjit Singh Dadial, 32, was the director of Cali Juicers Ltd, a wholesaler of soft drinks and fruit and vegetable juices that was incorporated in 2019. Despite declaring a turnover of £250,000 in 2020, the Insolvency Service later discovered the company only turned over £2,000.

Off the back of this incident, Dave Elliot, Chief Investigator at The Insolvency Service, stated: “The Insolvency Service will not hesitate to investigate and use its powers against those who have abused the COVID-19 support schemes.”

Discover more about The Insolvency Service: What does The Insolvency Service do?

Scottish Directors Banned for Failing to Pay £70,000 Tax

A couple from Galashiels, Scotland have been disqualified as directors for six years each after failing to pay £70,000 in tax. Robert Headspeath, 60, and Mandy Headspeath, 56, also failed to maintain and keep adequate accountancy records for the company.

The husband and wife were directors of Advanced Signs from March 2015 until February 2020, before the company went into liquidation following a winding-up petition by the authorities. The company owed £70,044 in unpaid tax when it was liquidated.

Given the company’s poorly maintained accountancy records, it was not possible for the Insolvency Service to determine the true source of various income, including over £70,000 deposited at ATMs during this period.

The disqualification undertakings now prevent both from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.

England and Wales: Monthly Insolvency Statistics for February 2022

Company Insolvencies

  • There were 1,512 registered company insolvencies in February 2022.
    • 1,329 CVLs
    • 74 compulsory liquidations
    • 3 CVAs
    • 109 administrations
  • More than double the amount recorded in February 2021 (685).
  • 13% more than the amount registered pre-pandemic in February 2020 (1,346).

Individual Insolvencies

  • There were 2,242 DROs and 588 bankruptcies in February 2022.
  • The number of DROs was 61% higher than in February 2021 but 6% lower than in February 2020.
  • Total bankruptcies were 36% lower than in February 2021 and 62% lower than in February 2020.

If you are worried about debt, bankruptcy or possible insolvency, contact Asset Solutions today on 0800 689 3861. Our experienced team members provide unrivalled assistance to individuals throughout the entire insolvency process and help to stop bankruptcy.

We understand that anyone facing problem debt is likely to feel overwhelmed and intimidated. That’s why we’re here to support you throughout the process and help you achieve the best results possible for your situation. Contact us today for more information.