Why the Covid Repayment Amnesty is a last chance to “come clean” – and what you should do if you can’t.
HM Treasury has made a generous offer to businesses with outstanding Bounce Back Loans or other forms of pandemic-related debt this week.
Their offer is this – repay any and all outstanding Covid-era debt within three months with “no questions asked” about their initial eligibility and avoid being caught in a major crackdown beginning next year.
Covid counter-fraud commissioner Tom Hayhoe said: “Our message to those who still owe Covid era money is simple – pay now and clear your conscience or face the consequences.
“This money belongs in communities, the NHS, police and armed forces. Those who don’t take up this straightforward offer and have knowingly or wrongly claimed tax-payer funded help could face prosecution, disqualification or prison.”
A Covid-fraud reporting website for whistleblowers is also being launched to allow the public to report a person or organisation suspected of committing covid fraud.
Reports can be filed anonymously with the government promising no personal or legal repercussions if they find that no fraud was committed.
The soft-launched Covid Repayment Amnesty scheme will run until the end of December 2025 and covers all Covid-era support, including the Bounce Back Loan Scheme (BBLS), CBILS, furlough payments (CJRS) and local authority grants.
For bounce back loan repayment is made by contacting the bank that originally issued the loan.
What happens if they can’t pay or won’t pay?
The amnesty isn’t just an offer; it’s also a final warning. The government has made it clear that once this window closes, they will move their efforts into pursuing outstanding debts into a higher gear with new and enhanced investigatory powers. The appointment of Tom Hayhoe as a Covid counter-fraud commissioner is the first step in a significant and aggressive change of approach.
We have every reason to take him at his word that this isn’t an empty threat.
The scale of the outstanding arrears is vast with an estimated £1.88 billion remaining unpaid in fraudulent bounce back loans alone.
HMRC are already securing convictions with bans and jail time for directors who inflated their income to secure loans or who fraudulently obtained the money across one or more loans. These aren’t isolated successes but the start of a concerted effort to recoup billions in taxpayer money from a government that really needs good financial news to shout about.
Differences between struggling to repay and deliberate fraud
There is a vital difference between fraudulent claims and businesses in genuine financial hardship with the crackdown aimed squarely at those who went out to deliberately defraud the system.
Many directors took out bounce back loans in good faith to protect their businesses in unprecedented times and due to various ongoing economic pressures, are struggling to meet the repayment schedule.
The pressure from lenders and the government is going to intensify over the next few weeks and months so don’t be tempted to ignore or hide from the situation as there could be serious personal and professional consequences.
If you have outstanding bounce back loans or any other debt that you’re struggling to repay then get in touch with us. We offer a free initial consultation to discuss your situation and will work with you to produce a feasible and workable plan of action for your business depending on your aims for it.
The Covid Repayment Amnesty will end in just over 100 days time but you can begin your path back to profitability right now – by getting in contact today.