The Insolvency Service (IS) has set out a bold five-year vision to become the UK's lead enforcement body for corporate and insolvency standards in its investigation and enforcement strategy paper for the period 2026–2031, published on 16 July 2025.
The strategy paper signals a substantial shift in the agency's priorities, from reactive insolvency regulation to proactive corporate enforcement and intelligence-led economic crime disruption.
The agency's ambition is clear: to be recognised as the UK's leading authority in enforcing corporate and insolvency standards. And whilst the strategy paper is brief, there is enough detail to suggest the IS is serious about tackling economic crime and improving corporate behaviour in the UK.
A broader remit – Beyond insolvency
The IS has historically focused on bankruptcies, director disqualifications and insolvency-related misconduct. In 2024/25 alone, it disqualified 1,036 directors and secured over £3.7 million in compensation orders and undertakings. Although this existing role, together with the agency's related mandate enforcing the Companies and Insolvency Acts, remains, the strategy paper elevates the investigation of economic crime facilitated through companies to a distinct, separate objective and confirms that the IS will now lead on more cases involving fraud and money laundering where it is best placed to do so.
Work on matters far removed from typical insolvency cases has already started: the IS has initiated investigations into around 2,000 companies linked to abuse of dormant company status, involving overseas directors with links to tax avoidance, tax evasion schemes and money laundering.
These developments will come as no surprise – the IS has seen significant changes to its statutory function over the last few decades, including the introduction of legislation in 2021 granting it powers to investigate and disqualify directors of dissolved companies, thereby closing a long-standing loophole that allowed directors to sidestep scrutiny by avoiding a formal insolvency process.
In a similar vein, the strategy paper expressly contemplates further reform: “We will ensure our legislation provides the modern enforcement platform our teams need […] This will involve a review of the disqualification framework and our powers to investigate live companies.” One area for possible legislative change is phoenixism – where failing companies are abandoned and reborn under similar names – which has recently been subject to political scrutiny.
ECCTA and a quiet redistribution of enforcement power
The sort of legislative developments alluded to in the strategy paper have already started – and the paper makes clear just how important the Economic Crime and Corporate Transparency Act 2023 (ECCTA) is to the agency's expanded enforcement agenda.
The enhanced powers given to Companies House by ECCTA have been widely reported. Less well known, however, is that the IS holds sole responsibility for 78 new offences created by ECCTA and shares responsibility with Companies House for a further eight offences.
Offences the IS will lead on include using UK corporate structures and property to launder illicit funds and engage in other illegal activities, as well as non-compliance with filing requirements relating to the Register of Overseas Entities.
Collaboration and intelligence
The strategy paper emphasises closer collaboration not just with Companies House, but also with HMRC, the NECC, the FCA, the SFO, and devolved enforcement bodies. This reflects not only the need to share information and intelligence with other agencies, but also the increasingly complex and cross-jurisdictional nature of economic crime.
The National Crime Agency recently announced the removal of 11,500 UK companies from the Companies House register, which illustrates the kind of joint operations the IS intends to expand. That multi-agency crackdown – involving the IS, Companies House, HMRC, the NCA, police forces and other partners – targeted high-risk incorporation addresses and company formation agents suspected of enabling large-scale money laundering and other criminality. The IS has signalled it will build on this model to deliver more proactive disruption activity.
The agency will also seek to improve its own intelligence and data-led enforcement capabilities. The strategy paper speaks of an “Intelligence Roadmap”, a wide-ranging plan that includes investment in a new intelligence database to map how UK corporate structures are misused; the development of AI tools to assist in data analysis and improve case prioritisation; expanded digital forensic capabilities to identify and preserve evidence; and the appointment of a new forensic accountant – with support from an external commercial panel – to enhance financial crime investigations.
The strategy paper suggests these capabilities will be used assertively, pledging to be “bolder in our use of intelligence, uncompromising in our use of the tools we already have” and to push for further legislative changes where needed.
Funding structures – A source of contention?
The increased activity envisaged by the strategy paper will be funded by a model that links the expansion of the IS's enforcement role to the broader reform of UK corporate transparency, with money coming from fees levied by Companies House rather than central government.
The strategy also sets out an intention to work “increasingly collaboratively” with Companies House to uphold the Companies Acts and maintain the integrity of the registers – agreeing common enforcement objectives, integrating intelligence functions, and building a pipeline of referrals shaped in part by Companies House's own compliance priorities.
This funding and operational alignment raises questions about governance and prioritisation: to what extent will Companies House act as a gatekeeper for case referrals, and how will resources be allocated between traditional insolvency work and newer economic crime priorities? Whether the ambitious plans set out in the strategy can be realised will depend on how far the IS can navigate these possible tensions.
What does this mean for businesses and directors?
The takeaway for businesses and directors is clear: the IS intends to become a more active, better resourced and more assertive enforcement body. Whilst some agencies have sought civil or regulatory settlements in relation to criminal conduct, the strategy paper expressly refers to the possibility of criminal sanctions and enforcement.
Directors should expect greater scrutiny of dormant companies, dissolved companies, and opaque ownership structures.
Employment practices and tax compliance will also fall within scope, alongside traditional misconduct and insolvency abuse.
Importantly, the IS also plans to build out its education offering for directors, alongside guidance for victims and a more active public presence to deter misconduct.
Conclusion – A new corporate crime enforcer
The IS is quietly undergoing a transformation that could significantly reshape the UK's approach to corporate enforcement.
Whilst the strategy paper is relatively high-level, it contains enough technical detail to lend credence to the ambitious plans it sets out. If the changes envisaged in the paper come to fruition, the IS will be repositioned as a central actor in the fight against economic crime, alongside the likes of Companies House, the SFO and the NECC. A useful comparator is Australia's ASIC, which combines corporate regulation with enforcement and insolvency oversight, and regularly hands out penalties in the region of £100 million a year – figures that compare very favourably to the IS's current civil recoveries, which are in the low millions.
The real test will be one of execution: it is an open question whether the IS can successfully build the necessary technical capacity, manage resource allocation, and navigate inter-agency priorities.
The direction of travel, though, is clear. If the strategy delivers on its ambitions, the IS will move beyond its traditional duties centred on bankruptcies, disqualifications and insolvency practitioner oversight, taking on a clear role as a corporate crime enforcer.
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