Directors to face bans for finding loopholes to avoid Covid loan repayments
The Insolvency Service will be given new, beefed up powers to crack down on those looking to avoid repaying their pandemic loans.
The Insolvency Service will be able to investigate and sanction company directors trying to dissolve their business to avoid repaying creditors, the Financial Times first reported.
The government is reportedly keen to clamp down on any potential fraud in repaying Covid loans.
Under the new rules, which were part of a bill put before Parliament today, directors found guilty of misusing the insolvency process would face sanctions such as being banned from serving as a company director for up to 15 years.
Business secretary Kwasi Kwarteng told the FT the government would “not hesitate to disqualify directors who deliberately leave employees and the British taxpayer out of pocket.
“Extending powers to investigate directors of dissolved companies means those who have previously been able to avoid their responsibilities will be held to account,” he added.