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Why 2022 could be the year of the bounce back loan crackdown

Why 2022 could be the year of the bounce back loan crackdown

We’ve written previously about The Insolvency Service and HMRC’s ongoing crackdown against bounce back loan fraud with, it has to be said, mixed results.  Our own investigation into the potential scale of outstanding bounce back loans remaining unpaid revealed that official sources estimated that between £6.9 billion and £27.9 billion would go unrecovered. Last time […]
bounce back loan crackdown

We’ve written previously about The Insolvency Service and HMRC’s ongoing crackdown against bounce back loan fraud with, it has to be said, mixed results. 

Our own investigation into the potential scale of outstanding bounce back loans remaining unpaid revealed that official sources estimated that between £6.9 billion and £27.9 billion would go unrecovered.

Last time we tried to update the progress of the recovery process we found that the story developed literally in front of us when counter fraud minister Lord Agnew resigned in a House of Lords statement because of his dissatisfaction with progress in recovering outstanding bounce back loan debts.

This was based on a government estimate that expected that 37% or £17 billion of the total loan amount would not be recovered which was slightly better than the media case scenario we outlined (£18.6 billion outstanding) but is still the equivalent of the cost of building 15 new stadiums the size of Wembley. 


Justice is being delivered against hundreds of directors and their businesses who sought to dishonestly obtain or use a bounce back loan.

A recently published policy paper sheds some light on the progress the Insolvency Service has made in both tracing fraudulent borrowing and trying to claw back some of those funds for the public purse. 

According to the paper, the Insolvency Service has so far achieved the following positive results:

  • 106 director disqualifications
  • 48 bankruptcy restrictions
  • 13 companies wound up in the public interest

The latest 10-year director disqualification for bounce back loan fraud was announced last week.

It’s also interesting to see that the Insolvency Service is drawing attention to the number of companies that have been wound up especially as all of the remaining restrictions on winding up petitions are set to be lifted at the end of March. 

Creditors currently can only seek to have a business wound up for non payment of outstanding debts if they total £10,000 or more. 

Removing the restrictions will almost certainly see an increase in petitions being sought through the courts which could be a problem for business owners and directors who have not had to think about defending a winding up petition for nearly two years.

Chris Horner, insolvency director with BusinessRescueExpert said: “One constant factor we’re continuing to see this year is HMRC’s attitude to businesses trying to dissolve with an outstanding bounce back loan. 

“It’s implacably against it and is stopping any business from striking off with these debts outstanding. 

“Worse news for directors in this position is that HMRC is also using more compensation orders to try and make them personally liable for any outstanding debts. This is in addition to their increased motivation for more disqualifications and other measures.

“It’s imperative in 2022 for any business owner or director to get some independent insolvency advice before pursuing any course of action that could bring them to the attention of the authorities.

“There are perfectly legal and appropriate ways to close down a business even if it has an outstanding bounce back loan or other debts, but they have to be considered or approached very carefully and precisely.

“This is where an insolvency professional can prove their value.”


Government finances will come under increased pressure this year with the Ukraine situation adding additional uncertainty to an already tight budget. 

This will filter down to increased pressure on lenders and HMRC to increase recovery actions against bounce back loan borrowers, but the mood will also affect other creditors seeking repayment and breathing space from their own demands in a vicious recovery cycle. 

The best thing any business owner or director can do before taking action is to make the most of any available time and fully explore what options are available to them before acting. 

One easy and easily accessible way of doing this is arranging a free consultation with one of our expert advisors. 

After they get a better understanding of your unique situation and challenges, they will be able to let you know, clearly, what choices you’ve realistically got and how you can make them work.   

Clients usually tell us that these are far more wide ranging than they would have assumed before speaking to us but also be aware that the longer you hold off speaking to an expert, the less room you’ll have to manoeuvre when you really need it, so get in touch today.

Business Rescue Expert is part of Robson Scott Associates Limited, a limited company registered in England and Wales No. 05331812, a leading independent insolvency practice, specialising in business rescue advice. The company holds professional indemnity insurance and complies with the EU Services Directive. Christopher Horner (IP no 16150) is licenced by the Insolvency Practitioners Association

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