Reply With QuoteStill nothing for this section of taxpayers but government offers £27m of our money to match the children in need total. Genuinely shaking my head.
There's nothing stopping a one man ltd co. taking a salary and making a loan to the company as/if needed. The majority of one man ltd companies I see pay a dividend similar to the net profit, often to clear their overdrawn loan account within 9 months of the year end.Originally Posted by Thewatchbloke
Still nothing for this section of taxpayers but government offers £27m of our money to match the children in need total. Genuinely shaking my head.
I'm losing track of this now ... when I log into my HMRC account I was expecting to see a summary of the payments and the periods covered; but nothing.
I'm guessing the system isn't keeping up with the payments.
As far as I recall there have been two payments; what periods do these cover and will there be further payments?
Anyone up to speed on these?
I believe the next claims window opens 30/11/20.
Last edited by Montello; 6th November 2020 at 13:00.
I believe the first payment capped at 2500 per month was from May till July . The second payment was August till October and was also £2500 capped per month.
The latest one was I think 30% of income from Nov to January. Although it’s prob changing again as we speak
Enjoyed seeing Naga Munchetty getting stuck into another government stooge on BBC Breakfast this morning, who quite clearly could offer no justification whatsoever for the lack of support for SME directors. He did offer the pathetic excuse of increased welfare benefits, which may indeed be of some help to those of us that end up going bankrupt and losing our businesses/sources of income. Nice job.
I switched from running a limited company taking dividends to being self employed 3 years ago ... for various reasons.
Had I not done so I'd be getting zero ... pure luck ... seems a very tough stance on small businesses where the owners take dividends as wages.
Sounds an accurate summation
It’s worse than that, at least the companies had the January bonus to use, which would have improved cash flow, now they have taken that away, most companies expect extended Christmas shutdowns, and still there is nothing that directors can take, the argument being that they will still respond to emails and phone calls, I know several directors who have not taken a penny since March, it isn’t sustainable.
Except for the BBL's that will never be paid back...
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Why will they never be paid back? my understanding is the director is liable to pay them back
Correct, the director is liable. Owing to the ease at which the Government demanded the loans be made available by the banks, there is a substantial number of claims which have been made fraudulently. The general consensus amongst the banking industry is that at the very least, 50% of all loans have been made fraudulently. Now that can mean either claiming £50k when the criteria says your business was only eligible for £20k, but you still intend to pay back. Or just outright no intent to ever repay.
https://www.bbc.co.uk/news/business-54432916
The first one was 80% capped at £2500, the second was 70% capped at £2187.50 I believe.
I’m not sure exactly what the third one will be.
Just received this from HMRC..
"Yesterday, 5th November 2020, the Chancellor announced that the UK Government is increasing the overall level of the next SEISS grant from 55% to 80% of trading profits.
This grant will cover a three-month period from the start of November until the end of January. The UK Government will pay a taxable grant which is based on 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500.
The SEISS Grant Extension will last for six months in total, from 1st November 2020 to 30rd April 2021. A further grant will cover February to April, as grants will be paid in two lump sum instalments each covering a three-month period. The government will set out further details, including the level of that grant, in due course. Full details on checking if you’re eligible for the current grant and how to claim will be published on GOV.UK week commencing 23rd November."
I've got a couple of mates who are Directors of one-man-band type companies, who were genuinely affected by lockdown, and who have every intention of repaying their loans,
However, neither are particularly bank/accounts 'savvy' so I applied for their loans for them.
It took literally minutes to successfully apply.
When applying I saw no mention of Directors Guarantees and the loans were made to the companies, NOT the Directors, so I can well foresee that many less scrupulous Directors will have no intention of repaying the loans whatsoever.
Copied from the web:
Bounce Back Loans and Personal Guarantees: Understanding your liability
The government is providing 100% security to the banks for loans taken out under the BBLS, however, it is the responsibility of the business to pay back the loan once monthly repayments begin following the initial 12-month grace period.
As the government is providing the banks security for the full loan amount, this means that company directors will not need to provide a personal guarantee to underwrite the borrowing.
Not having to provide a personal guarantee becomes extremely valuable if the company is unable to recover from the impact of Covid-19, or otherwise finds itself in financial distress at a later date. If the company becomes insolvent and subsequently enters a formal insolvency procedure, such as Creditors’ Voluntary Liquidation, then responsibility for repaying the Bounce Back Loan will remain solely with the company and liability cannot and will not be transferred to directors or other shareholders provided they comply with their statutory and fiduciary duties as a director. This means there is no risk to a director’s personal assets or individual credit rating should their company not be in a position to repay the loan.
This is the catch all clause. And arguably a director which has taken a £50k bounce back, but was not eligible for it, has breached their duties and can/could be held liable. I would imagine however there is going to be very little point in pursuing those who don't repay/claimed fraudulently; the costs of pursuing would likely outweigh what can be recovered. Albeit I could be wrong.
Sadly this will be a substantial bill for the tax payer, but it is not "lost" money. At some point that £50k loan will have to be spent, maybe on home renovations, meals out, cars, the cinema, watches, who knows, but it'll be cash that is circulating in the economy and prompting personal spending.
My understanding is that BBLs are secured on the company and so there is no personal liability for the directors UNLESS they are shown to have breached their statutory and fiduciary duties, such as acting in a fraudulent way in relation to the application for the BBL or how the loan was used.
Last edited by deepreddave; 6th November 2020 at 16:28.
I have clients who have taken BBLs. They have all advised me that they were trivial to request with virtually no checking. Im not surprised that there has been huge fraud around these loans and I doubt the recovery of the loans will be more than 30-40%. A very reckless use of the tax payers money ... not to worry though they can just print some more ...
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