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£50K Interest Free Loan for 12 Months

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  • hgllgh
    replied
    Originally posted by GhostofTarbera View Post
    In just about every case
    [/url]
    I'm just wondering if anyone has seen the smallprint in the BBL documents/rules or had it explained to them by an accountant to confirm this understanding?

    Leave a comment:


  • GhostofTarbera
    replied
    Originally posted by NowPermOutsideUK View Post
    This is how I understood it as well - I imagine many people will use the BBL to pay themselves and wives before the company is insolvent
    In just about every case


    Sent from my iPhone using Contractor UK Forum

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  • NowPermOutsideUK
    replied
    Originally posted by hgllgh View Post
    How is it fraud? The loan has been taken out in good faith to stop the company from folding in the first place, salary has not been increased, but after a while if it's still clear the company position is untenable in the current circumstances, it is within the rights of a company director to close the company. This was my original point, the government seems willing to take this risk of BBL defaults with no personal liability on company directors.
    This is how I understood it as well - I imagine many people will use the BBL to pay themselves and wives before the company is insolvent

    Leave a comment:


  • hgllgh
    replied
    Originally posted by d000hg View Post
    If you're happy committing fraud... Let us know how it works out. Do you honestly think nobody is going to come after you?

    And we wonder why the public has little sympathy for contractors.
    How is it fraud? The loan has been taken out in good faith to stop the company from folding in the first place, salary has not been increased, but after a while if it's still clear the company position is untenable in the current circumstances, it is within the rights of a company director to close the company. This was my original point, the government seems willing to take this risk of BBL defaults with no personal liability on company directors.

    Leave a comment:


  • eek
    replied
    Originally posted by hgllgh View Post
    Yes but the company is closing and does not have the funds to repay the full 50K so defaults on the 35K it cannot pay back. This was the point I was making... the government seems willing to take this risk and take any losses on the chin due to the pandemic.
    I wouldn't be 100% sure about that - I suspect any wages paid to a director wouldn't be a problem but they may query pension contributions especially if your company doesn't do regular ones (and even then they may query the continuation of them).

    Leave a comment:


  • hgllgh
    replied
    Originally posted by ladymuck View Post
    How did you reduce the loan to £15k? Your company will still owe £50k.
    Yes but the company is closing and does not have the funds to repay the full 50K so defaults on the 35K it cannot pay back. This was the point I was making... the government seems willing to take this risk and take any losses on the chin due to the pandemic.

    Leave a comment:


  • jamesbrown
    replied
    Something to keep an eye on:

    Talks to prevent bounce back business loans scandal | Business | The Times

    Leave a comment:


  • cwah
    replied
    Originally posted by hgllgh View Post
    Do:
    - Pay yourself via PAYE salary.
    - Pay your pension because its company expense
    - Buy new equipment or anything related.

    So I could have 10K bank balance, take £50K BBL, (£60K balance), then pay for example 6 months salary and pension (say £30K), then give up the ghost and take a perm role, and after winding up Ltd Co., only have £15K to pay on the loan, and there is no personal liability comeback or credit record sullied?
    I believe pension can only be distributed from company profit. However, if you were to pay your own salary via the company, then close down the company with the left over, it shouldn't be a problem. Assuming of course there isn't obvious fraud such as suddenly increasing your salary from £730/month to £5000/month.

    Leave a comment:


  • d000hg
    replied
    Originally posted by hgllgh View Post
    Do:
    - Pay yourself via PAYE salary.
    - Pay your pension because its company expense
    - Buy new equipment or anything related.

    So I could have 10K bank balance, take £50K BBL, (£60K balance), then pay for example 6 months salary and pension (say £30K), then give up the ghost and take a perm role, and after winding up Ltd Co., only have £15K to pay on the loan, and there is no personal liability comeback or credit record sullied?
    If you're happy committing fraud... Let us know how it works out. Do you honestly think nobody is going to come after you?

    And we wonder why the public has little sympathy for contractors.

    Sent from my ONEPLUS A6003 using Tapatalk

    Leave a comment:


  • ladymuck
    replied
    Originally posted by hgllgh View Post
    Do:
    - Pay yourself via PAYE salary.
    - Pay your pension because its company expense
    - Buy new equipment or anything related.

    So I could have 10K bank balance, take £50K BBL, (£60K balance), then pay for example 6 months salary and pension (say £30K), then give up the ghost and take a perm role, and after winding up Ltd Co., only have £15K to pay on the loan, and there is no personal liability comeback or credit record sullied?
    How did you reduce the loan to £15k? Your company will still owe £50k.

    Leave a comment:

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