The Insolvency Service is taking an increasingly firm stance on directors committing fraud, with 122 convictions in the year up to 30 September 2021; this is up from 40 for the same period last year. This shows a 205% increase in convictions alone, with a further 87% increase in the number of directors now facing prison sentences in 2021/22.
The CBILs and BBLs support schemes were introduced in March 2020 as a lifeline for businesses forced to close under Covid-19 government restrictions, however due to demand and an ever increasing time pressure to support businesses with haste, banks were forced to mitigate usual due diligence measures. For this reason, the susceptibility for banks facing fraud has intensified, showing a clear correlation between the rise in convictions and the introduction of such support schemes.
Equally, the hurried implementation of the Furlough scheme by HMRC has also contributed to the rise in fraud cases, with an estimated £5bn claimed fraudulently through Furlough monies.
The National Audit Office has projected that up to 60% of BBLs may be fraudulent or defaulted on, representing £27bn pounds of taxpayer funds, however the full extent of the fraud remains unknown.
For more information on bankruptcy, liquidation, administration and all the other insolvency procedures, or should you or your company be facing financial difficulties and you need to chat, please telephone Charlotte Hutchinson on 01377 257788 and she will make you an appointment with one of our insolvency professionals at our Driffield, Hull, Grimsby, Scunthorpe or York offices. Our initial meetings are free and without obligation. Meetings can be held virtually or in any of our offices whilst observing the socially distancing guidelines.
Because we are an independent insolvency practice, we keep our overheads low and have put systems in place to deal with simple liquidations at an affordable price of from £1,995 + VAT + Disbursements. Our MVLs are from £995 + VAT + Disbursements.