Businesses who were trading prior to 1 March 2020, are less than two years old and have been negatively impacted by COVID-19 can, subject to full Scheme … These cookies do not store any personal information. Of course any strike off action by directors must conform with the statutory requirements to inform creditors also. It depends. I have some sympathy for the banks - they were chastised over the last recession, have been penalised over PPI insurance and have to repay dozy customers that give their life savings to scam merchants. This category only includes cookies that ensures basic functionalities and security features of the website. However, if you have a Bounce Back Loan, you can still apply for a CBILS loan and, if your application is approved, you’ll then be asked to settle your BBLS loan. How to apply for a Bounce Back Loan. Coronavirus Business Bounce Back Loans are attractive, easily accessible, and cheap at just 2.5%. Beware – this can bite you. This means that if you can’t pay back what you owe, the government will step in as your guarantor and take over your payments to your lender. Even though the bounce-back loan programme – which offers firms cheap funding worth up to £50,000 – is 100% government-backed, lenders still have to … As per this government site: ‘If your company has creditors, members, employees etc, you should inform all the necessary people before applying.‘. If you wish to close a company, and you took a Bounce Back Loan, it is still possible to eradicate the debt and close the limited company. Government rules state that you may only have one Bounce Back Loan. I have randomly picked out one bank to use as an example, that being Santander, look at the rules they have on their website for applying for a Bounce Back … [Updated 16.11.2020] On 2 November, following the news of the second lockdown, the government has announced existing loans can be topped up should they need additional finance. If you’re a sole trader, this means one per person.. But second BBL was a clear fraudulent application. You can’t apply for a bounce back loan and a coronavirus business interruption loan (CBIL). All Bounce Back Loans have these standard features. If you need help understanding the best way forward for your company, use the live chat during working hours, or call us on. Is engaged in trading or commercial activity in the UK and was established by 1 March 2020; Does not already have a Bounce Back or CBILS loan (or in the process of applying for one with another lender) though you can convert an existing CBILS loan to a BBLS loan. The new coronavirus Bounce Back Loans scheme was announced in April as a result of the financial pressures the coronavirus pandemic has caused to many small businesses in the UK. Yes many will now dissolve the company and does anyone care - nope. Bounce back loans can be used to repay existing finance. It’s a logical line of enquiry if you’re concerned about the potential costs of liquidation, and you’re seeking a cheaper alternative to closing the company permanently. It has come to my attention that a fairly new client of mine has obtained two bounce back loans with separate banks. But probably months before the defrauded bank with second BBL finds out even though OP knew all along. I have heard this from other clients where builders have two bounceback loan from two bank accounts (one bank account from when they were self employed then converted to limited company). David. Since they were introduced in May of this year (2020), more than one million Bounce Back Loans have been approved, with more than £30bn of funding landing in the accounts of the UK’s small businesses. A loan amount of between £2,000 and £50,000; A fixed interest rate of 2.5%; No repayments for the first 12 … From a legal perspective, bounce back loans are a debt like any other. It has come to my attention that a fairly new client of mine has obtained two bounce back loans with separate banks. With a voluntary liquidation, a licensed insolvency practitioner deals with the company creditors, sells any assets to pay debts and finally strikes the company off as part of the process. Is OP clear of consequences if he just informs the people who really only care about terrorism and big sum international fraud? I appreciate in the grand scheme of an AM report is is probably small fry, but suspect that does not negate the need to carry out our reporting duties. We have noted from the records that he obtained a £50k bounce back loan in May and has spent the lot personally (mainly gambling, takeaways and a new Range Rover in his own name!). They different from conventional business loans in that they don’t require a personal guarantee, but while this means the lender won’t be able to repossess your house it doesn’t change anything else. No information should be provided to HMRC about the client's financial affairs without the prior agreement of the client. Bounce back loans DON'T affect your eligibility for other Government personal support. All Rights Reserved. The exact scenario predicted within about a nano-second of them being announced with no director's personal liability. Yes but the OP's reporting obligation arises when he suspects that the borrower has received money from a fraudulent application (not when the bank loses money). Man in 40s suspected of recruiting people to set up fake companies and bank accounts to launder money. Necessary cookies are absolutely essential for the website to function properly. The maximum term for a BBLS loan is 6 years and businesses won’t pay any interest for the first 12 months. There are rumours going around about the widespread misuse of Bounce Back Loans (‘BBL’) by companies. Find out what you can do about creditor pressure, and what could happen if you ignore it. If you want your SAR to be acted upon, do include appropriate XX glossary codes (see recent info on AWEB), do include self-assessment tax refs / VAT numbers if relevant, do include a narrative that explains (to a non-accountant!) We’ve helped 1000’s of directors navigate difficult financial circumstances. Find out more about solvent and insolvent liquidation options for UK limited companies. Thanks to David Winch for again clarifying, Explore our AccountingWEB Live Shows and Episodes, View our 2020 Accounting Excellence Firm Awards Finalists, Inside the mind of an HMRC Tax Investigator. If I have already received a Bounce Back Loan, can I increase (top-up) my existing loan? You can still apply for a bounce back loan and get the self-employment income support grants, and you may still be eligible for universal credit. As the … Last ACCA CPD lecturer suggest authorities complained that accountants reports were all irrelevant tiny self protection reports that wasted the NCA time, but also accountants do not send in enough of these time wasting reports. I assume I need to make a ML report, but wondering if I have any other obligations (particulary with regards to the 2 loans). Twitter users have claimed in recent days that NatWest has shut their accounts after approving bounce-back loans. Need a guaranteed confidential meeting today with one of our experts? I'm aware you can report furlough fraud etc via HMRC, but wondering if this is the appropriate place to deal with the loans? When they do start paying interest, they won’t have to pay more than 2.5%. It was launched on 4th May, and is part of the UK government's package of measures to provide financial support to businesses that have been negatively impacted by the coronavirus pandemic. Read our full guides to corporate recovery processes such as administration and CVA. It is important to note that you can only have one Bounce Back Loan provider. 1 hour ago. speak with an expert for immediate advice. The painless way to comply with 5MLD post COVID, How to get back control of self assessment, The TaxCalc Survival Guide to Self Assessment, Bounce Back Loan Fraud/Abuse - AML Obligations, KYC/AML requirements/process, first large client, Sunak ‘does not recognise’ excluded self-employed, Member of LLP couldn’t also be its employee. Lines are open Monday-Friday 09:00-17:00 (excluding Bank holidays). The short answer is no, you can’t increase your Bounce Back Loan and you can only have one Bounce Back Loan. As the COVID-19 crisis deepens, many directors are discovering that bounce back loans haven’t proved enough for the long term survival of their business. I have suggested one be immediately repaid if the second claimed in error, but that fell on deaf ears. The 100% government backed scheme is available for the smallest businesses affected and has been designed to provide loans of up to £50,000 to help keep such businesses operating during these challenging times. Director currently has an overdrawn loan account and mentioned that they intend to declare a bonus through PAYE to clear the loan and then let the company fold (with zero intention of repaying the 2x BBLs). The problem and potential tax bill arises from what you do with the money, not how you got it. Company Debt is a trading name of Company Debt Ltd. Company Debt Ltd is a company registered in England & Wales under company number 06352368. Our experts are standing by via live chat, telephone or email to offer you a free consultation. But you’ll now need to proceed in the correct way and, when you have a limited company with debt, this doesn’t mean dissolving or striking off. Whether you’re a sole trader or limited company, you now have two options to choose between: the original Business Interruption Loan or a Bounce Back Loan. The law pertaining to this can be found in Section 1003 (6) of the Companies Act which states that, even if struck off, “The liability (if any) of every director, managing officer and member of the company continues and may be enforced as if the company had not been dissolved.”. Mortgage: How SEISS, Bounce Back Loans & other support will impact your application Connor Coombe-Whitlock. Understand how insolvency can affect you, and where you may be held liable. what you suspect, who you suspect & why it is illegal. Would … Meanwhile, a Facebook group called “NatWest closed down my … Normally rumours so strong as these have some substance behind them. You also have the option to opt-out of these cookies. If you’re a limited company and have a loan with us already, you could apply for a Bounce Back Loan. For directors thinking that perhaps a strike off might provide a quick solution, there will be continuous uncertainty ahead, rather than a line in the sand, unless you address the debts before attempting to dissolve. Despite HMRC’s guarantee of these loans, the responsibility for chasing defaults remains with the banks who have been asked to use their normal debt enforcement protocols. The attractiveness of the Bounce Back Loan is without doubt – 6 year term, no repayments in the first year and 2.5% interest. The long answer is that you could potentially request to … I bet they don't even pay across the payroll taxes. Thank you for your comments, they are most helpful. that the person has obtained a loan advance (however small) by fraud then you have an obligation to file a Suspicious Activity Report. I hope the banks don't get paid out because it looks like they've not done enough work on these applications. But do remember that the NCA receive hundreds of thousands of SARs every year. The naivety of government is quite frankly breathtaking. If you need help understanding the best way forward for your company, use the live chat during working hours, or call us on 08000 746 757. At risk of stating the obvious, the accountant has a duty of confidentiality to his client. P.S. By continuing to browse the site, you are agreeing to our. Welcome to my new series of videos, in which I will be looking at some of the things bank bosses that are part of the Bounce Back Loan scheme have said when questioned by Members . Much appreciated Their business has been severely impacted by COVID (unable to furlough) and most of the two loans have already been drawn out. COVID hits AML compliance: are you up to speed? The Bounce Back Loan Scheme (BBLS) provides financial support to businesses across the UK that: are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak; can benefit from £50,000 or less in finance; The scheme is a part of a wider package of government support for UK businesses and employees. Two arrested over alleged £500,000 coronavirus ‘bounce back’ loan scam. This website uses cookies. We also use third-party cookies that help us analyze and understand how you use this website. HMRC can indeed reisntate a company if it’s been struck off incorrectly, and this can happen at any period in the future. But, used incorrectly, you could be facing a 32.5% tax bill. As the prospect of insolvency looms, the question arises if a company can be dissolved with a bounce back loan. The relevant glossary codes would appear to be XXCVDXX and XXGPSXX. 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