£50K Interest Free Loan for 12 Months

[jamesbrown]

I agree with that to a point but Limited Companies exist for a reason and that is to keep individuals financial affairs separate from a corporate entity. If the debt is against a company and was distributed reasonably (e.g. salary) then the Director as individual goes and gets a FTC or Inside IR35 contract through an Umbrella it has nothing to do with the Ltd.

Note I am not recommending doing it but I can see it happening quite a lot.

Right, they are separate, so it will come down to whether the director carried out their statutory duties. Obviously, if the director extracted the money as a DL, then they are personally indebted, so there’s no question about what happens next. In short, we can only speculate about individual cases. Also, we can only speculate about what the creditors will do.

[jayn200]

Didn't I list three options, of which getting an outside contract was one?

I guess you didn't really think this through. If you're hoping you can walk away from the BBL because you cannot secure a contract outside of IR35 or one where the fee payer agrees to contract with your company, then best of luck to you. I think your creditors will think differently and they will probably have a very good case. If any prospective client is mandating no PSCs or a contract that is inside, the debt remains and you'll still need to pay it back, end of story. It remains to be seen how aggressively your debt will be pursued by either the bank or HMG. Assuming they pursue it - as I think they will - then my point about the DL is that, if you chose to extract the BBL that way, then there is absolutely no argument about how the money is paid back. You've clarified that you didn't extract it that way. Am I supposed to read your mind? The question, then, will be whether you've met your statutory duties as director. TBD.

It's a company debt with no personal guarantee. You have no personal obligation to pay it back to the bank or government.

Now if you extracted it as a directors loan you need to pay back the directors loan but that obligation is independent of the bounce back loan obligation.

[jamesbrown]

It's a company debt with no personal guarantee. You have no personal obligation to pay it back to the bank or government.

Try reading carefully. As I said, you have responsibilities as a director. It just depends what you did and the reasoning at the time. If you were really struggling for work prior to the pandemic and then you received a BBL and issued dividends from BBL money, well, it's TBD whether you met your responsibilities in the event that the BBL cannot be repaid.

Now if you extracted it as a directors loan you need to pay back the directors loan but that obligation is independent of the bounce back loan obligation.

Which part of this exact thing that I wrote did you not understand? (Of course it's dependent on the BBL when the DL in question needs to be paid back to satisfy the creditors of the BBL. )

[simes]

If you're hoping you can walk away from the BBL because you cannot secure a contract outside of IR35 or one where the fee payer agrees to contract with your company, then best of luck to you.

Deary me.

Did I even say that? Anywhere?

Mine was a hypothetical comment on the scenario. A comment on the irony, if you will.

Your bouncing up and down assuming from this that, I wish to walk away from the loan is assumptive fiction. For the record. I don't and won't. Clear enough for you?

[jamesbrown]

Deary me.

Did I even say that? Anywhere?

Mine was a hypothetical comment on the scenario. A comment on the irony, if you will.

Your bouncing up and down assuming from this that, I wish to walk away from the loan is assumptive fiction. For the record. I don't and won't. Clear enough for you?

Deary me. As was mine. The clue's in the "if".

Clear enough for you?

Oh, and "you're".

[simes]

Deary me. As was mine. The clue's in the "if".

Clear enough for you?

Oh, and "you're".

Nope, the ownership of the bouncing is Yours. So 'your'.

We might be done here.

[cwah]

I just took a BBL and it's great for the war chest.

For those trying to abuse the system, here's the list of do and don't with the money from the BBL:
Do:
- Pay yourself via PAYE salary.
- Pay your pension because its company expense
- Buy new equipment or anything related.

Don't:
- Pay dividend. You can only pay dividend from company profit. Loan is not profit so you shouldn't do that.
- Pay corporation tax / vat. Again, it should have been money that stayed in your bank account to pay for that.
- Give yourself a director loan. Not only it may be considered as income by HMRC for extra tax owed, but you may also be chased for debt by administrators should your company fold.

As long as you do the "Do's", should you not be able to pay back the loan and decide to fold the company, you wouldn't owe anything to anyone.

[jamesbrown]

Agree with the above advice.

[LondonPM1]

I just took a BBL and it's great for the war chest.

For those trying to abuse the system, here's the list of do and don't with the money from the BBL:
Do:
- Pay yourself via PAYE salary.
- Pay your pension because its company expense
- Buy new equipment or anything related.

Don't:
- Pay dividend. You can only pay dividend from company profit. Loan is not profit so you shouldn't do that.
- Pay corporation tax / vat. Again, it should have been money that stayed in your bank account to pay for that.
- Give yourself a director loan. Not only it may be considered as income by HMRC for extra tax owed, but you may also be chased for debt by administrators should your company fold.

As long as you do the "Do's", should you not be able to pay back the loan and decide to fold the company, you wouldn't owe anything to anyone.

This is sound advice

Anyone doing this and not having much in the company without any company assets can treat the bbl as a gift from Rishi like the half price burgers for the common people

[GhostofTarbera]

£50K Interest Free Loan for 12 Months

Good report on BBC news tonight, thousands of fraudsters applying in bulk for BBL loans

Free money


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