As we rattle through the months, I am seeing more and more Company Directors being hit with long disqualifications when winding up their companies when a Bounce Back Loan is involved when the Insolvency Service discover the funds from that loan were used for personal benefit and not the benefit of the business, here is another one, this time regarding a Lloyds Bank BBL.
Mr Kazi Jamiur Rahman (Mr Rahman) applied for a Bounce Back Loan (BBL) of £14,413, on behalf of KJR Consultants Limited and the company received those funds on 07 May 2020.
Between 07 May 20 and 15 May 2020 Mr Rahman withdrew these funds and used them to “sustain his daily living costs” which was contrary to the terms of the BBL scheme, that was to provide economic benefit to the company rather than his personal benefit.
The company was approved for a BBL of £14,413 on 6 May, these funds were credited to the company’s bank account on 7 May. On the same day Mr Rahman received a payment of £3,445.
On 15 May Mr Rahman withdrew £14,816 from the company’s bank account leaving a zero balance.
Between 15 May 2020 and 6 November 2020, the company received income of £26,788, in this same period Mr Rahman was paid £27,499 in addition to the BBL monies.
As at 31 January 2020 the company owed £16,949 to HMRC in respect of corporation tax for the years ending 30 April 2018 and 2019. No payments were made to HMRC in respect of these sums which remain outstanding at the date of Liquidation. HMRC and the BBL provider are the company’s only 2 creditors, HMRC’s final claim is £23,026 and the BBL remains unpaid.
The company ceased to trade on 2 October following the cessation of a contract with its main customer. Mr Rahman paid £1,700 to the company clearing its overdraft facility on 16 November 2020 and a further £3,000 on 7 December which was used to pay the Liquidator’s fees.
Accounts prepared for the company after it entered into liquidation, for the period ending 30 April 21 show that the Director’s Loan, increased from £18,641 to £37,061, these funds remain unpaid by the Director.