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50K Bounceback Loan

Reporting Obligation

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An ex client (Ltd) wants to come back to me and do get on well with them.  The 31st December 2019 accounts need to be submitted

I was just about to take them on board then realised they have taken a 50K bounceback loan when turnover can't be more than 100K per annum,  I keep coming across businesses getting 50K bounceback loans (with less than 200K turnover) and peeves me right off.   Not that I am jealous but the fact no one bothers checking if the business does have a certain amount of turnover.

Do I have any reporting obligation ?



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By puzzel
23rd Sep 2020 19:35

Hmm, ex client, so why did he leave?

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Replying to puzzel:
By sanjay100
23rd Sep 2020 21:04

They wanted a local accountant so they could visit. I live 70 miles away from them Now they don't mind as they value the service I gave them and they didn't receive that from their previous accountant.

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By fawltybasil2575
23rd Sep 2020 23:47

@ sanjay100 (OP).

Firstly, any obligation to submit an SAR to NCA is unaffected by whether you do or do not agree to act again for the former client company.

You indicate that you cannot conceive that the Turnover would have been £200,000 (you are clearly aware that the maximum Bounceback loan is 25% of Turnover, up to £50,000). I assume that you are reasonably sure that the Turnover is below £200,000 (regardless of your not having seen any records) but presumably you have some evidence or knowledge thereof, regardless of whether this evidence/knowledge was obtained recently from the former client or elsewhere.

On the above assumptions, importantly you have to form an opinion as to whether the company [more precisely, any representative of the company which has approached you with a view to your acting again] has acted dishonestly in applying for the loan; and no doubt in that regard you are aware that applicants have to confirm, to the lender, that the loan amount applied for does not breach the above-mentioned 25% condition.

If, after due consideration, you have knowledge that, or at least a genuine suspicion that, the loan has been obtained dishonestly, then I consider that you DO have a duty to report.

Since you also state that you “keep coming across” other businesses which have obtained £50,000 loans then you have an obligation to report to NCA in those cases also, where you believe the loan has been dishonestly obtained (subject to your having come across such information in the course of a regulated activity, no doubt your own business).

Your knowledge of the likely turnover levels of businesses for whom you have not previously acted may of course well be materially less than your knowledge re your former client company; and hence in those cases it might be that you are no more than “speculating” that the loan has been dishonestly applied for (no report is appropriate where only “speculation” applies).

My above comments are based upon my understanding of previous guidance in “Any Answers” by David Winch (who will no doubt, if he sees this thread, correct any erroneous comments in this post).


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Replying to fawltybasil2575:
David Winch
By David Winch
24th Sep 2020 10:51

I agree. Dishonesty (as distinct from negligence) is key.

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By Open all hours
24th Sep 2020 21:05

‘No one bothers checking’. We had a zoom conference with our MP just before he went to a Treasury meeting which finalised the BBL criteria.
We told him the calendar year turnover was meaningless for most and open to abuse. We suggested the last completed tax returns be used because at least the client had signed them. Impression given was that speed should take precedence over accuracy. And so, here we are today, sweeping up the mess.

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By jvenegas16
24th Sep 2020 21:39

Why are the banks left out of their own responsibility? They know how the business operates and how the bank account has been used to give them an indication of turnover. And even so they approved the applications.

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