Insolvency Related News
Latest News from UK Liquidators
The Insolvency Service has banned a company director for a period of nine years as part of a crackdown on abuses and fraud relating to the government’s Covid-19 financial relief schemes.
So-called Bounce Back Loans were effectively guaranteed by the government and taken on by millions of businesses in the months after coronavirus first hit the UK to help them survive the worst months of the crisis.
Most companies used those loans in the right way and for the reasons intended but some directors are understood to have taken on loans despite their companies having been sold or become insolvent and ceased to trade.
Now the government is looking to identify individual company directors who took on Bounce Back Loans despite knowing that their businesses would never be able to pay them back.
One such case already identified involves a 38-year-old former director of a cleaning services company called N&S Solutions Ltd, which entered insolvency in August 2019 and liquidation in June 2020.
The Insolvency Service has now banned that individual from acting as a company director for a period of nine years having established that he took on a £30,000 loan in May 2020 via the Bounce Back scheme.
It’s understood that the newly banned director used the money his company loaned to pay off a single trade creditor, despite sizeable debts being owed to several other creditors, including HMRC.
Three more company directors have been told by the Insolvency Service that they will be restricted in what bankruptcy undertakings they can be involved with for the next several years for essentially aiming to defraud the government’s Bounce Back Loans scheme in similar ways.
Alan Draycott, the deputy official receiver, said in a statement: “The government loan schemes have provided a lifeline to millions of businesses across the UK – helping them to continue trading during the pandemic and protecting millions of jobs.
“As these cases show, the Insolvency Service will not hesitate to investigate and use our powers against those who abused the Covid-19 support schemes.”
If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
Complete the below to get in touch