February 2023 Round-Up: The UK’s latest insolvency and bankruptcy statistics

This month we cover the insolvency stats for January 2023 and we look at three insolvency news stories from February. Including:

• A BBL fraudster who has been jailed for 12 months
• 10-year-ban for a boss who claimed £50,000 COVID loan
• A scaffolder has been given an 11-year ban for BBL abuse

We will detail these three cases and then go over company and individual insolvencies for January. 

Read last month’s insolvency stats: Bankruptcy and Insolvency News January 2023

12-month jail sentence for BBL fraudster

Kulwinder Singh Sidhu, director of a haulage company based in Stanwell for ten years was recently sentenced to 12 months imprisonment. 

Mr Sidhu had abused the Bounce Back Loan financial support scheme by taking out £50,000 on behalf of his business and then transferring it to his personal bank account only two days later – before filing paperwork with Companies House that led to him dissolving the business.

The BBL scheme was designed to assist businesses during the COVID pandemic. Mr Sidhu clearly had no intention of using the loan to assist his business and pled guilty at Guildford Crown Court to the charges under the Companies Act and Fraud Act.

In an effort to dissolve his company, Sidhu failed to adhere to critical regulations; those in breach of notifications must give seven days’ notice before applying the process. What’s more, a criminal offence was committed when he disregarded this duty – notifying interested parties like creditors and banks with outstanding loans.

The Insolvency Service investigation further revealed that prior to obtaining Bounce back loan funds, Sidhu had fraudulently exaggerated the company’s revenue- which was then quickly dispersed through personal accounts as well as other firms connected by him.

Mr Sidhu was sentenced on the 13th of February 2023 to 12 months in jail. He was also given a confiscation order for £50,000 which he has paid in full and he will not be able to act as a director for 6 years.

Read more about jail time for BBL abuse: 15 months imprisonment for BBL fraud

10-year ban for a boss who claimed £50,000 with £203 in the bank 

Thomas Whyte, aged 76 from Carluke applied for a £50,000 Bounce Back Loan on behalf of his dormant company Fortress Restructuring Ltd in May 2020. 

Despite the accounts filed with Companies House indicating that the firm had no assets other than its share capital and being declared as ‘dormant’, Mr Whyte falsely stated that it was trading at an annual turnover of £250,000. 

When speaking to The Insolvency Service representatives in October 2020 he stated that the company had no trading address, had never traded and was currently not trading.

On 1 February 2021, the Secretary of State for Business made a public petition to wind up the company in the public interest. The Court of Session granted this request and issued it publicly through the Gazette then four days later a copy was sent to Mr Whyte via email.

Mr Whyte claimed to not have received the email until late February, however between the 5th and the 16th of February 2021, funds were distributed between Mr Whyte, the company accountant and others.

Thomas Whyte is now banned from company directorship for 10 years. The company liquidator has been able to recover £37,500 of the £50,000 loan from Mr Whyte.

Read more: What Happens to Pensions When a Company Goes Bankrupt?

Scaffolder receives 10-year directorship ban

David McGuinness, a 41-year-old businessman from Sutton Coldfield in the Birmingham area incorporated MC-Dalt Scaffolding Services Ltd. earlier in 2017 with its registered office located at Erdington, Birmingham. 

Despite the company’s 2019 accounts showing a low turnover of less than £20,000 and therefore being only eligible for a loan of around £4,000 under the Bounce Back Loan scheme; Mr McGuiness fraudulently stated its turnovers to be nearly £300,000. He received the full £50,000 in May 2020, then 2 months later applied to dissolve the business. This triggered an investigation by The Insolvency Service.

The investigation discovered the truth of the MC-Dalt Scaffolding accounts. Furthermore, it was revealed that Mr McGuinness had used the funds for personal use. One day after receiving the BBL he transferred £15,000 out of the company accounts. A further £35,000 was transferred to various other accounts. 

He also failed to notify creditors and interested parties within seven days when dissolving his company, which could result in criminal prosecution. 

David McGuinness did not dispute that he had abused the Bounce Back Loan and from the 3rd of January 2023, he will serve an 11-year disqualification.

Read more: Undischarged Bankrupt: What Does It Mean?

England and Wales Monthly Insolvency Statistics

Company Insolvencies during January 2023

• There were 1,671 company insolvencies in January 2023, 7% higher than the same month in 2022 (1,567)
  • 189 compulsory liquidations.
  • This is 52% higher than in 2022, but 36% lower than in 2020 just before the pandemic.
  • 1,382 CVLs, 37% higher than in January 2020.

Individual Insolvencies during January 2023

• 1,741 DROs were registered, and 612 bankruptcies in January 2023.
• On average, there were 6,328 IVAs registered in the 3-month period leading up to January 2023. This is 1% higher than the previous year. (These figures are likely to be an undercount as IVAs on the 30th and 31st of January 2023 were not added to the insolvency report).

Asset Solutions can help you annul your bankruptcy or help with your personal insolvency if you have a problem with your financial situation. 

We have years of experience helping people in similar situations and treat every enquiry as unique. Our financial advisors and solicitors are completely independent of us so we can get exactly the right help you need for your financial situation.

Contact us today at 0800 689 3861 if you believe you are heading into bankruptcy and we can help!