HMRC is investigating businesses that wrongfully received payments under the bounce back loan scheme. If you’re concerned about an HMRC bounce back loan investigation, or you have already received a letter stating that you’re under investigation, please contact us at Altion Law.
Bounce back loan fraud
In March 2021, the Department for Business, Energy and Industrial Strategy estimated that 11% of bounce back loans worth £4.9 billion were fraudulent. This includes those who deliberately applied for a loan despite not being eligible, and those who deliberately overstated their turnover. It also includes those who overestimated their losses, whether by design or miscalculation.
HMRC taxpayer taskforce
Now, the government is keen to claw back as much money as possible. It has given various UK authorities the power to investigate bounce back loan fraud, including HMRC. In fact, the government has set up a 1,200 person HMRC taskforce, which has the sole remit of combatting Covid-19 fraudsters. It is expected to recover £1.5 billion in fraudulent or incorrect payments made under the various Covid financial support schemes.
The HMRC taskforce will begin by conducting compliance checks on businesses who applied for a bounce back loan. Any indication of foul play will result in an HMRC investigation – be it a civil one or a criminal one. HMRC prefers to go down the civil route, which begins with you receiving a letter of investigation. Criminal investigations are reserved for the most serious of cases, such as those relating to organised criminal gangs.
Who else is investigating bounce back loan fraud?
Along with HMRC, the Insolvency Service is looking into companies that claimed a bounce back loan, only to close their doors with the debt still outstanding. Clearly, this is going to affect many businesses who could not ‘bounce back’ due to the ongoing effects of the pandemic. The Insolvency Service is now permitted to investigate companies that have already been dissolved, meaning everyone is potentially under the spotlight.
This may be cause for concern, but so long as the company went through the proper liquidation procedure, there is nothing to fear. However, directors of dissolved companies who failed to follow the correct liquidation process could be held personally liable for the debt. They may also face director disqualification proceedings.
The National Crime Agency, the City of London Police and the National Investigation Service are also investigating suspicions of bounce back loan fraud.
Are you facing an HMRC bounce back loan investigation?
If HMRC suspects a company of receiving incorrect payments under the bounce back loan scheme, it will send a letter detailing the nature of the allegations (unless it opts for a criminal investigation). If you receive a letter from HMRC stating that you claimed incorrect or fraudulent payments, contact us straightaway. We can liaise with HMRC and clarify any misunderstandings. Otherwise, it may result in a COP9 investigation.
We specialise in HMRC investigations, compliance and regulatory matters, and director disqualification. We can discuss your case with you and determine the best way forward. It may be that genuine mistakes were made, as opposed to deliberate deception. Alternatively, your claim may have been entirely legitimate, in which case the facts need to be presented to HMRC.
Contact us now
If your business is suspected of bounce back loan errors, or you are concerned that mistakes have been made, speak to our solicitors without delay.
If you would like to have a free confidential discussion with a member of our team, please either make a Free Request For Call Back or call us directly on 01908 414990 and we will be pleased to help you.