CH282210 - Director disqualification: general

Director disqualification is the process whereby an individual is disqualified, for a specified period between 2 and 15 years, from becoming a director of a company, or directly or indirectly being concerned or taking part in the promotion, formation or management of a company without permission from the court.

Directors are usually disqualified where there has been a company insolvency and the director(s) have been shown to be unfit.

Disqualification proceedings are a civil, not criminal, process and are carried out pursuant to the Company Directors Disqualification Act 1986 (CDDA). Proceedings are usually brought by The Secretary of State for Business, Energy and Industrial Strategy, through their Executive Agency, The Insolvency Service (INSS).

INSS requests to HMRC for information, in respect of their director disqualification work, are sent to Debt Management’s Enforcement and Insolvency Services (EIS), using standard pro-forma letters. However, if it is apparent that there has been previous compliance activity, the HMRC officer with knowledge of the case may be contacted, either directly by INSS, or by EIS seeking information.

Such requests for information are made by INSS pursuant to an information power contained in s.7(4) of the CDDA, which effectively compels HMRC to provide the information, see Disclosure helpcard below for further information on the relevant legal gateways. HMRC officers are also encouraged to make pro-active referrals to INSS where director misconduct is identified and disclosure permits.