The Bounce Back Loan scheme was introduced by the Government to stimulate businesses during the COVID lockdowns. Small to medium sized businesses could borrow between £2,000 and up to 25% of their actual turnover. Successful applicants would enjoy favourable interest terms and repayment schemes. The Treasury underwrote these loans, leaving them liable for £47Bn.
The Public Accounts Committee estimate that in excess of £4.9Bn of those loans were obtained via fraud and up to half of the debt will remain unpaid. The committee reports that the Department for Business and Trade expedited the delivery of these loans, forcing banks to dispense with routine applicant checks. Facing media and political scrutiny, HMRC is increasing its investigation into BBL fraud with routine checks for BBL recipients. In June 2023, the Government had 11 businesses wound up for fraudulent receipt of the BBL.
The purpose of the scheme was to help small and medium-sized businesses to borrow:
At the time, the Government guaranteed 100% of the loan. There would not be any fees or interest to pay for the first 12 months. After 12 months, the interest rate would be charged at 2.5% a year.
The duration of the loan was 6 years.
The loan was granted on the basis of either:
These loans were self-certified.
At the time, businesses from any sector could apply except for:
The authorities are investigating persons in businesses in the following regard:
While the major Bounce Back Loan frauds tend to involve misrepresentation at the application stage, using the loan money for improper purposes also counts as fraud. An insolvent company presenting to Bounce Back Loan lenders as a solvent company would thus be fraudulent.
Another route to Bounce Back Loan fraud is via an applicant presenting their ‘actual’ turnover as their ‘projected’ turnover. For example, a business in year 5 (future) might turn over many times its takings in year 1 (current). Businesses who applied present their future turnover as current turnover may have done so naively but can still expect some form of pursuit from HMRC.
Finally, HMRC will also assess the way the loan was spent. To be compliant, any spending must benefit the business.
Bounce Back Loan frauds often fall within the scope of the Fraud Act 2006 and the Theft Act 1968. The offences include:
However, if pursued, Bounce Back Loan fraud is serious and attracts serious penalties.
If you are arrested for this offence, you will be taken to a police station for the purpose of being interviewed under caution. Among other rights you have the right to be represented at this interview by a solicitor free of charge. This is usually a duty solicitor nominated by the police. You also have however the right to nominate a solicitor of your choice. The solicitor will be able to obtain some information from the investigators about why you have been arrested and will be able to discuss this with you and provide you with advice prior to the interview.
ABV Solicitors have expert fraud solicitors able to attend the police station on short notice nationwide.
Upon receipt of such a letter it is critical that you seek the assistance of a solicitor immediately. ABV Solicitors will allocate a specialist fraud solicitor for you and make arrangements on your behalf to liaise with the investigators and facilitate an interview at your convenience.
This will allow sufficient time for you to arrange a face-to-face meeting with a specialist solicitor in advance of any interview so you can be advised, and fully prepared on what to expect.
We are here to fully support you and those concerned during this difficult time. Obtaining immediate legal advice can make all the difference to the outcome of the investigation.
This can be an extremely stressful time for you, your family and your business.
You may have already been interviewed and released on bail or released under investigation. You may have not used a solicitor at all during your interview or are not confident with the solicitor who represented you and require a specialist solicitor with experience in this area.
Whatever the situation, ABV Solicitors have a dedicated team of experts who are experienced in this field and who can provide you with sound advice and assistance.
If you have been charged with Bounce Back Loan fraud you must seek the assistance of a defence specialist immediately. ABV Solicitors have a dedicated Fraud and Financial Crime department consisting of experienced solicitors who are specialist in this field.
ABV Solicitors can provide immediate advice and assistance and assist you and your business during this stressful time.
Law enforcement agencies such as the police, HMRC, FCA or SFO often use ancillary powers in addition to making arrests and search warrants. These include applying for Restraint Orders or Account Freezing Orders under the Proceeds of Crime Act 2002.
The purpose of this is to prevent those under suspicion to dissipate assets which may have been acquired through the commission of committing offences.
These Orders are draconian and can cause severe disruption to the lives of individuals and those connected to them including their businesses.
ABV Solicitors have a dedicated team of experts within their Fraud and Financial Crime Department who specialise in tackling these Orders.
If any of the above circumstances apply to you or someone you know contact ABV Solicitors Fraud and Financial Crime Department immediately on 0344 587 9996 or visit our website at www.abvsolicitors.co.uk
ABV Solicitors are available 24/7 and offer their professional expertise and assistance nationwide.
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