More disturbing bounceback loan news.

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If money is there to be taken people will take it.  Criminals why go through the effort of burglary or buggings when there is a 50K bounceback loan multiplied by unlimited applications ready for you. 

Here is what I have come across:

1) Duplicate applications from builders who have a sole trader and limited bank accounts

2) Companies less than three months old applying for bounceback loans the trying to liquidate

3) Companies with less than 50K Turnover applying for 50K bounceback loans 

4) Banks closing bank account but even though the company has taken a bounceback loan.  I don't understand why banks would do this.

I am coming across liquidators who are targeting companies with bounceback loans.  I don't blame them as these companies will be flush with cash. Most of the bounceback loans will be written off too much hassle isn't to locate the unscrupulous individuals (most likely be somewhere warm) and investigate. There will be some companies that will not be trading and just stagnate.  Director would have spent the bounceback loan and just let the company drift.  

If only someone had just checked at companies house woud have saved so much heartache.  We accountants have to some difficult conversations with some clients as well as dealing with overdrawn loan accounts which I personally hate as extra work and difficult to charge the client






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By 97mwill
03rd Dec 2021 14:13

It is sickening the level of fraud there was on this scheme and most of them will get away with it with hardly any repercussions. The banks should be held partly to account here, and some simple checks on Companies House and sight of the last copy accounts would've reduced this problem significantly.

The latest one we've had is a client who had minimal trade in his company (£30k turnover I think) and took out 2 bounce back loans for £30k each because apparently the questions asked "what do you think your turnover could be?"!!! Surprise surprise he now wants rid of the company.

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Replying to 97mwill:
By Jim100
03rd Dec 2021 20:25

Just makes an accountants life difficult as we have to decide in some cases if we disengage and report them, then there is Director Loan issue, and when a new client contacts me I ask them if they have had a bounceback loan. A couple of potential clients I had rejected as they took more of the bounceback loan what they were entitled to.

Accountingweb did highlight a case recently of 150K Bounceback fraud but only punishment was disqualification (big deal) and the directors did not not have to pay the money back or incur penalties of face criminal charges. No deterrent as taking out a bounceback loan was risk free for many and they know it just like winning a prize. Furthermore, I doubt many will pay taxes on the withdrawal of the bounceback loans. They will just let the company stay dormant.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
09th Dec 2021 09:20

There's yet more evidence - if it were needed at this point - in the comments added to Richard Hattersley's write-up of the NAO report on Bounce Back Loan fraud:

Quite a few AccountingWEB members have taken a "told you so" stance, but there are so many nuances here - including the underlying urge to try and support small businesses through very difficult times - that it's hard not to get exasperated.

Just as Covid-19 exposed a lack of proper contingency planning for medical emergencies, perhaps it's time for government, industry lobbies and interested professionals to devote more attention to business and economic resilience. How would you have designed a support scheme that wasn't a fraudster's banquet?

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