Amnesty scheme launched for Covid-19 business loans

Government introduces ‘no questions asked’ scheme

The government introduced a ‘lose it or use it’ opportunity for businesses to repay Covid loans they didn’t need without any judgement or repercussions. The ‘no questions asked’ scheme opened on 12 September.

The scheme has been launched ahead of an upgrade in investigatory powers for the Insolvency Service which will enable them to exercise a firmer hand when investigating suspected Covid-19 loan fraud.

The voluntary repayment scheme covers a wide range of support offered during the coronavirus pandemic, including:

• Coronavirus Job Retention Scheme (CJRS)
• Self Employed Income Support Scheme (SEISS)
• Eat Out to Help Out Scheme
• Cultural Recovery Fund (email [email protected]
• Business support grants
• Grants from the Department for Health & Social Care
• Covid-19 Business Loan Guarantee Schemes, such as Bounce Back Loan

During the Covid-19 pandemic, government-backed loans provided lifesaving support to businesses, however, the number of fraudulent applications that passed through the net are expected to range around £10 billion. In response to this, the government appointed a Covid Counter-Fraud Commissioner to tackle Covid-19 loan fraud, along with actively pursuing company directors who breached loan rules by issuing fines and director bans.

While the scheme promises to ask no questions if payments are made during the repayment window, businesses suspected of loan fraud are not immune to personal or legal repercussions. A fraud reporting site has been launched through which suspicions of Covid-19 loan fraud can be anonymously reported.

“Called for help with closing non-trading companies and Chelsea advised me on what to do and instead of taking advantage as others would by taking on the case and charging loads. She gave me a solution that would cost £20. Very pleased with the service and thankful for Chelsea’s advice.”

AB

 

Contact the Real Business Rescue Team today

Chelsea Williams
Business Debt Expert

What happens if you misuse a Bounce Back Loan?

If you misused a Covid-19 loan or accessed it fraudulently, any government guarantee provided as part of the loan will lapse as this breaches the terms of the loan agreement. If a Covid loan, such as a Bounce Back Loan, was used for a purpose other than that prescribed or accessed fraudulently, you risk being held personally liable for the business debt. If suspicions of misconduct arise, an investigation into director conduct can be launched, even after the company enters liquidation.

The Insolvency Service confirmed to The Insolvency Practitioners Association (IPA) that repayment under the voluntary repayment scheme does not guarantee any protection to directors from enforcement action. 

Read our complete Bounce Back Loan guide to understand what happens if you misuse a Bounce Back Loan.

How can Real Business Rescue help?

If you have a Bounce Back Loan that you cannot afford to repay, understand your options, including negotiating a payment holiday or longer payment terms. If the financial problems are widespread, your company may require expert advice from a licensed insolvency practitioner. For more information on Bounce Back Loan repayments and how to navigate potential insolvency, reach out to a member of the Real Business Rescue team.