Coronavirus Business Interruption Loans – fraud investigations on the horizon?
Publication

Coronavirus Business Interruption Loans – fraud investigations on the horizon?

The Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Bank Loan Scheme (BBLS) are the UK government-backed schemes introduced to help SME and large businesses through the Covid-19 pandemic.

Even at the time of roll-out, regulators and enforcement agencies recognised that the speed at which funds were needed by businesses to maintain the status of ‘going concern’ would result in less rigour in assessing the legitimacy of the entitlement. As the FCA acknowledged in a 4th May 2020 press release:

‘The unprecedented nature of the current coronavirus pandemic and the impact on the economy has created a climate of deep uncertainty and anxiety for the economy, business and consumers. The FCA recognises the Government’s Schemes need to be able to enable fast and efficient lending decisions. Ensuring that firms manage the risks of fraud and money laundering is essential to a well-functioning financial services system. We recognise that, currently, the need to manage these risks should be balanced against the need for the fast and efficient release of funds to businesses under the Government’s Schemes.’

Like any other emergency measure designed to ameliorate a black swan event, there is the inevitable risk of improper use, whether deliberate or otherwise. Institutions and individuals involved in the process, either as lenders or borrowers need to be fully aware of the enhanced scrutiny that will come in the next few months as the UK government tries to ensure that taxpayer largesse is all accounted for. That accounting will involve the instruction of enforcement agencies to look closely at the loan process and take action where appropriate. It will be no surprise if Her Majesty’s Revenue & Customs’ Criminal and Civil Investigations teams and the Financial Conduct Authority’s Enforcement Wholesale and Retail Investigations teams become very busy in the next few months.

Richardson Lissack has considerable expertise in advising corporates and individuals accused of abusing the tax system.

Our team have successfully defended institutions and individuals being investigated by Her Majesty’s Revenue & Customs, the Financial Conduct Authority, The Pensions Regulator and the Serious Fraud Office in relation to matters such as Valued Added Tax, Income Tax, the Apprenticeship Scheme, Carbon Tax Credits and Research & Development Tax credits.

In addition, the team can call upon a combined twenty-five years’ worth of experience at Her Majesty’s Revenue & Customs and the Financial Conduct Authority (as an investigator and enforcement lawyer respectively) from two of its members.

Related

Publications

Buildings

Account Freezing Orders (AFOs) – Frequently Asked Questions

What is an Account Freezing Order ? An Account Freezing Order (AFO) is a court order that prohibits a person from making withdrawals or payments from ...

Building

Dawn Raids: What are they and how should you handle one?

Investigations into corporate crime by authorities often lead to dawn raids being carried out in both businesses and residential premises. During the ...

Building

Health and Safety Regulations and Corporate Manslaughter in the UK: A Comprehensive Overview

Health and safety regulations are paramount in ensuring the well-being of employees and the public within any organisation. In the United Kingdom, str...

Building

The Economic Crime and Corporate Transparency Bill

The Economic Crime and Corporate Transparency Act 2023 is intended to address a number of concerns about economic crime, including the use of companie...

Building

Stamp Duty Land Tax (SDLT) rebate fraud

Stamp Duty Land Tax (SDLT) is a tax that must be paid when you buy property in the UK. It is calculated as a percentage of the purchase price, and the...

Building

Section 2 notice

Section 2 of the Criminal Justice Act 1987 is a crucial piece of legislation in the United Kingdom’s fight against financial crime. The act was ...

Building

Understanding Regulatory Investigations

Regulatory investigations can be a daunting experience for businesses and individuals alike. The consequences of non-compliance can be severe, with fi...

Buildings

Cryptocurrency fraud

The rise of cryptocurrencies has been accompanied by a proliferation of cryptocurrency frauds ‘crypto frauds’). In recent years, there have been n...

2 buildings looking up at them

Pros and cons of using an umbrella company

Advantages of working for an umbrella company It is important to stress that many umbrella companies operate in a totally legitimate manner and can br...

2 buildings looking up at them

Are umbrella companies legal?

What are umbrella companies? Umbrella companies have become increasingly common in the UK in recent years with the number now standing at over 500. Th...

london gherkin

PAYE Umbrella Scheme Fraud

PAYE umbrella scheme fraud is a sophisticated and organised way of defrauding HMRC and individual workers out of money. In some instances, these schem...

2 buildings looking up at them

Criminal Tax Investigation

A tax investigation is an investigation by HMRC into your tax affairs and tax history. They have a broad remit to investigate a wide range of potentia...

2 buildings looking up at them

Difficult Decisions for Directors – a word of warning!

What the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill means for directors. As we emerge from lockdown many company d...

2 buildings looking up at them

Has your business been reported for tax evasion?

If you are notified that your business has been reported for tax evasion the whole process can be incredibly stressful and daunting. It can have range...

Let’s work together

Contact Us

arrow-downarrow-left-greyarrow-leftarrow-right-0c2535 arrow-right-ffffff arrow-right-greyarrow-rightbullet-icon-whitebullet-iconcloseicon-connecticon-cross-double icon-cross-right icon-email icon-nav-lefticon-nav-righticon-phoneicon-pinicon-reachlawyer-linkedin-icon nav-menu-arrow rl-logo-icon social_facebooksocial_googleplussocial_instagramsocial_linkedin_altsocial_linkedin_altsocial_pinterestlogo-twitter-glyph-32social_youtube