Bounce Back Loan Warning!
The Insolvency Service will be given new powers to investigate directors of companies that have been dissolved.
This will close a loophole previously used to avoid paying back Government-backed loans.
These powers include harsher punishments for those found guilty of misconduct.
Change in Bounce Back Loan Rules
Previously, some company directors have taken out Government-backed loans, then moved the money to a different company, before closing down the first one.
This meant those who were owed money by the original company, whether it by HMRC or suppliers, were left out of pocket, and the Bounce Back Loan amount was paid back to the banks by the government.
Often the director would then start up an identical company after the original one was dissolved, starting up business again and pocketing the money.
These new powers allow the insolvency service to search these people out and a crackdown on this practice, enforcing greater punishments on those found guilty.
These powers include banning the person from being a director for 15 years, as well as criminal prosecution for fraud.
Kind regards Ilyas