The practice, known as phoenixing, is where companies are placed into insolvency but the business and its assets are transferred over to a new, identical company, leaving creditors unpaid.

This includes suppliers, customers and HMRC, which lost £836 million to small‑business phoenixing in the 2022-23 tax year, the latest year for which data is available.

This was 45pc higher than the £570 million previously estimated, with phoenixing accounting for a fifth of HMRC’s losses which it never expects to recover.

There were 23,938 registered company insolvencies in England and Wales last year, with the vast majority (18,525) being creditors’ voluntary liquidations where directors chose to put their companies into liquidation, according to figures from the government’s Insolvency Service.

Annual company insolvencies by type, England and Wales, 2005 to 2025 (Image: The Insolvency Service)

In East Anglia, insolvency‑related activity rose 15pc to 931 cases in the first three months of this year, compared to the end of 2025, according to R3’s quarterly business health report.

Research by the UK insolvency and restructuring trade body also found that nearly one in five insolvency practitioners encountered phoenix-style abuse within a single twelve-month period.

It is now feared that the rising number of company insolvencies may open the door for abusive and unlawful phoenixing.

Phoenix companies are new companies that take over the business and assets of an insolvent predecessor, typically with a similar name and the same........

© Norwich Evening News