Two directors banned for abusing Bounce Back Loan scheme

26 January 2022

Two directors have been banned from further directorships for 10 and 11 years because of coronavirus support scheme abuse. Does the press release from The Insolvency Service indicate a scaling up of compliance action for fraud carried out under these schemes?

Both companies provided inflated estimates of their annual turnover, therefore awarding them to Bounce Back Loans (BBLs) of higher amounts than they would otherwise receive. The actual earnings of the first company would have been below the £8000 per year turnover threshold to be eligible for the loan.

Following the payment of the BBLs payments began to various individuals of £2,000 per month, one of these individuals was a director’s relative. The directors claimed these were genuine business expenses, but no evidence was provided to back up these claims.

The chief investigator, Mike Smith, at The Insolvency Service said:

“Government loan schemes have provided a lifeline to millions of businesses across the UK – preserving their existence during the pandemic and protecting millions of jobs. As these cases show, The Insolvency Service will not hesitate to investigate and use its powers against those who appear to have abused the COVID-19 support schemes.”

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