£50K Interest Free Loan for 12 Months

[d000hg]

Similar to Metro bank:

"We are looking into it" (in the run up to availability, 4th May)

followed by:

"We plan to announce more information on the 11th May" (the more info simply states they have submitted an application to HM Gov't and engaged a 3rd party to build an application website/back office tool)

No dosh, no process and no timescales... the idea of going through the process to open an account with A.N Other bank starting to look more attractive.

M

Just how desperate for this cash are you? It's going to run for months.

[d000hg]

Same with me. Applied for 40 large ones last night and got the money into my account this morning via Santander. Incredibly easy. £600 for 3 mins work.

What was the £600?

[jamesbrown]

What was the £600?

Interest, presumably.

Does make me wonder about the level of fraud though (not accusing anyone here, but just w/r to how lax it is).

If you're still earning, still in contract, you cannot apply for these loans, in principle. If you lost at least some business, you can apply, I think. There are probably gray areas and it's all self-certified, so there's no one to stop you. But if it's BAU for you and you're just doing this to earn some interest, that's morally bankrupt IMHO, regardless of whether you're challenged down the line.

[d000hg]

As if a contractor would do something morally dubious to make a few quid from the taxpayer! That would risk making the public and HMRC think we're just operating the way we do to game the system!

It's 1 or 2 days income you don't need, for adding 40k - an entire person's salary - to national debt. And presumably someone else is paying the 600 too, so a wealthy contractor can get some free cash. Doesn't sound entirely wonderful.

I wonder if this will be the next bn66 we're talking about in 5 years as people are hounded over improper loans. Interesting to hear what accountants are advising to clients who are not benched by CV... Clearly those who are are, are exactly the target audience for this?

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[jamesbrown]

Clearly those who are are, are exactly the target audience for this?

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Absolutely, anyone benched is golden. Would be impossible to prove that CV19 was not impacting them, and easy to prove that it was, simply by pointing to market metrics. However, I think the opposite is also true if the gov't cared to look in future.

[WordIsBond]

It's 1 or 2 days income you don't need, for adding 40k - an entire person's salary - to national debt. And presumably someone else is paying the 600 too, so a wealthy contractor can get some free cash. Doesn't sound entirely wonderful.

Let's not over-egg it. I completely agree that it is at best dubious to take these loans if you don't need them.

But it's not really adding a big amount to national debt unless you default on the loan. The only addition to the national debt is that the government is paying the bank the first year's interest. That's hardly a life-changing amount. If you default, yes, you've added to the national debt but if you default it's probably because you did end up needing it.

I've not taken a loan but if I were a one-man band with insufficient reserves I might, even if in contract, because there are reasonable chances that the next contract isn't coming. It's not as if the government support that ltdco contractors are receiving is at all comparable to what employees are receiving. They want us to pay the same tax but they aren't giving the same support. So I just might do it if I were at all concerned about the next twelve months.

And as for the £600 interest he'll receive, he's actually providing liquidity to the bank with which he'll deposit it. They are paying £600 but it helps them offer loans to others. That's not a bad thing, and it's largely irrelevant to the moral question. The moral question is solely on whether it is appropriate for someone who doesn't need it to have the government pay interest for a year.

[vwdan]

Long time, lurker here.

I applied to HSBC where I have my business account last Thursday. Didn't have to submit much info just last year's turnover. Money arrived in my business account yesterday. Easiest bit of finance that I've ever applied for.

Likewise - I wondered when I'd next hear something and then got a banking text message to say it had gone in.

[mjcp]

Just how desperate for this cash are you? It's going to run for months.

I'm not - Its a point of principle now: Jan - March gig came to an end. Lined up another, via Umbrella, so resigned from Ltd. Virus binned that new gig, so P45 from umbrella without earning. Reinstated to LTD to claim furlough and HRMC said "No".

Lady luck smiled and I have picked up a 2nd fiddle option on Agency PAYE terms... but the principle is that HMRC said no, and this is my way of settling the score in my mind!

M

[d000hg]

Let's not over-egg it. I completely agree that it is at best dubious to take these loans if you don't need them.

But it's not really adding a big amount to national debt unless you default on the loan. The only addition to the national debt is that the government is paying the bank the first year's interest. That's hardly a life-changing amount. If you default, yes, you've added to the national debt but if you default it's probably because you did end up needing it.

I've not taken a loan but if I were a one-man band with insufficient reserves I might, even if in contract, because there are reasonable chances that the next contract isn't coming. It's not as if the government support that ltdco contractors are receiving is at all comparable to what employees are receiving. They want us to pay the same tax but they aren't giving the same support. So I just might do it if I were at all concerned about the next twelve months.

And as for the £600 interest he'll receive, he's actually providing liquidity to the bank with which he'll deposit it. They are paying £600 but it helps them offer loans to others. That's not a bad thing, and it's largely irrelevant to the moral question. The moral question is solely on whether it is appropriate for someone who doesn't need it to have the government pay interest for a year.

Interesting points. But given the loan scheme seems set to remain for some time, taking a loan just in case you lose work later seems a stretch. Why not wait and see? DO we know when the scheme will run until by the way?

I think increased liquidity HAS been mentioned as a legitimate reason (?) though that is more relevant for people with considerable outgoings (stock, employees etc) but either way that doesn't seem the same as explicitly stating you're taking the loan as an investment. If you're cynically doing it for the interest, I really wouldn't go boasting about that online!

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[Jog On]

Interesting points. But given the loan scheme seems set to remain for some time, taking a loan just in case you lose work later seems a stretch. Why not wait and see? DO we know when the scheme will run until by the way?

I think increased liquidity HAS been mentioned as a legitimate reason (?) though that is more relevant for people with considerable outgoings (stock, employees etc) but either way that doesn't seem the same as explicitly stating you're taking the loan as an investment. If you're cynically doing it for the interest, I really wouldn't go boasting about that online!

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IMO that's fraud, the loan is for small businesses impacted by the virus so if you're not impacted and claiming it then you're opening yourself up to some well deserved grief in the future. If you're also boasting about it online then you're fuelling the image HMRC and a lot of the general public have of contractors as greedy tax avoiding sc*m.

You want the moral high ground over IR35 and how HMRC views/treats contractors? Don't be a douchebag and do this and crow about it online.