In an effort to put a stop to abuse of its Bounce Back Loan Scheme, the Government is currently considering a Bill which will assist the investigation of attempts by directors and companies to defraud its popular program that assisted businesses through the COVID-19 pandemic.
Some of the biggest known offenders were LV Distributions Ltd and SIO Traders Ltd which were recently wound-up in the High Court of Justice. These companies were found to have never traded and the directors had submitted false documentation to at least 14 local authorities as well as receiving £50,000 from the Bounce Back Loan Scheme. Since being wound-up the Official Receiver has been appointed as liquidator and continues to investigate the fraud and deception by the directors of these companies.
The Government is currently considering The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill which, if passed, will provide extra powers to the Insolvency Service to investigate Bounce Back Loan fraud in cases where the companies have already been dissolved. Such powers will be retrospective in nature and allow conduct that has passed to be under the spotlight.
Small Business Minister, Paul Scully, has said: ‘We are cracking down on Covid fraud across the board and those who have tried to take support they were not entitled to, which was given in response to the worst crisis of our lifetimes, can expect to face heavy consequences.’
What is clear is that the Government and the Insolvency Service are taking a stern view on the exploitation of Government assistance that was provided to companies during the Covid pandemic.
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