A Giant Bonfire of Taxpayers Money

[Si1]

https://www.ft.com/content/41d5fe0a-7b46-4dd7-96e3-710977dff81c

 

 

 

" At first, criminals were not going for the full £50,000 as they expected banks to check. But when that didn’t happen,” he adds, “they went hell for leather.”

 

His findings are supported by another bank fraud expert, who says that criminals would apply for loans of £48,000, assuming that applying for the full £50,000 would raise a red flag. But, he says, since the government allowed a further “top up” to the full amount for businesses, fraudsters have tried to come back for the remainder.

 

.....

 

 Banks can only lend up to £50,000, or a maximum of a quarter of a company’s turnover. This meant, according to a different banker, “we found a strangely large number of business customers had precisely £200,000 turnover last year”."

 

.......

 

 

" But some business owners saw a chance to pay down a credit card or a deposit for a property, invest in equities or even cryptocurrency, says one bank fraud expert. “Completely against the spirit and terms of the scheme but we honestly don’t know how we should treat these customers,” he adds.

 

 

 

[satsuma]

 

https://www.ft.com/content/41d5fe0a-7b46-4dd7-96e3-710977dff81c

 

 

 

" At first, criminals were not going for the full £50,000 as they expected banks to check. But when that didn’t happen,” he adds, “they went hell for leather.”

 

His findings are supported by another bank fraud expert, who says that criminals would apply for loans of £48,000, assuming that applying for the full £50,000 would raise a red flag. But, he says, since the government allowed a further “top up” to the full amount for businesses, fraudsters have tried to come back for the remainder.

 

.....

 

 Banks can only lend up to £50,000, or a maximum of a quarter of a company’s turnover. This meant, according to a different banker, “we found a strangely large number of business customers had precisely £200,000 turnover last year”."

 

.......

 

 

" But some business owners saw a chance to pay down a credit card or a deposit for a property, invest in equities or even cryptocurrency, says one bank fraud expert. “Completely against the spirit and terms of the scheme but we honestly don’t know how we should treat these customers,” he adds.

 

 

 

It would be for HMRC to deal with business funds used for personal use, that is taxable.  

[captainb]

 

It would be for HMRC to deal with business funds used for personal use, that is taxable.  

Not if its paid back post year end. 

Real issue is a lot of these hobby buisnesses won't exist when the debt becomes payable and it dissappears with the legal entity. 

Absolute madness to lend to those tiny companies without a directors personal guarantee and only the taxpayer is utterly stupid enough to do it. 

That and the 4. 5billion to organised crime as per the NAO. 

[satsuma]

 

Not if its paid back post year end. 

Real issue is a lot of these hobby buisnesses won't exist when the debt becomes payable and it dissappears with the legal entity. 

Absolute madness to lend to those tiny companies without a directors personal guarantee and only the taxpayer is utterly stupid enough to do it. 

That and the 4. 5billion to organised crime as per the NAO. 

A loan over 10k Is a benefit in kind, they have to declare it in a tax return and pay tax on the benefit 

[captainb]

 

A loan over 10k Is a benefit in kind, they have to declare it in a tax return and pay tax on the benefit 

Just charge yourself the 2.5% interest then and its no longer a benefit in kind as per the revenue. 

If its a hobby buisness much better to extract the cash as a divi or even salary, then collapse the company. Bye bye debt. 

Insane to lend to companies like that without a directors guarantee. 

[satsuma]

 

Just charge yourself the 2.5% interest then and its no longer a benefit in kind as per the revenue. 

If its a hobby buisness much better to extract the cash as a divi or even salary, then collapse the company. Bye bye debt. 

Insane to lend to companies like that without a directors guarantee. 

You have to pay either way and also declare the loan in your tax return.  I suspect some will be caught out by this, especially if they don’t repay their company in time.  In that situation what looked like free money could wind up with a large tax demand from HMRC.  I’d hope people talked to an accountant before taking a bouncy loan and sticking it into their personal bank account or for non business purposes.  

[shlomo]

 

https://www.ft.com/content/41d5fe0a-7b46-4dd7-96e3-710977dff81c

 

 

 

" At first, criminals were not going for the full £50,000 as they expected banks to check. But when that didn’t happen,” he adds, “they went hell for leather.”

 

His findings are supported by another bank fraud expert, who says that criminals would apply for loans of £48,000, assuming that applying for the full £50,000 would raise a red flag. But, he says, since the government allowed a further “top up” to the full amount for businesses, fraudsters have tried to come back for the remainder.

 

.....

 

 Banks can only lend up to £50,000, or a maximum of a quarter of a company’s turnover. This meant, according to a different banker, “we found a strangely large number of business customers had precisely £200,000 turnover last year”."

 

.......

 

 

" But some business owners saw a chance to pay down a credit card or a deposit for a property, invest in equities or even cryptocurrency, says one bank fraud expert. “Completely against the spirit and terms of the scheme but we honestly don’t know how we should treat these customers,” he adds.

 

 

 

I wonder how many of these are used as deposits to purchase property

[Si1]

 

I wonder how many of these are used as deposits to purchase property

My thoughts

[shlomo]

 

My thoughts

.....and if property prices do not crash it may work out to be a good move, especally if they end of trashing the currency

[jiltedjen]

 

 

" But some business owners saw a chance to pay down a credit card or a deposit for a property, invest in equities or even cryptocurrency, says one bank fraud expert. “Completely against the spirit and terms of the scheme but we honestly don’t know how we should treat these customers,” he adds.

 

 

 

when governments start throwing £50k without any checks, and pays a lot of peoples wages for no work, you can bet you plenty of people see the writing on the wall for fiat currency, eventually it will lead to huge inflation, and finite assets, houses, gold, land, bitcoin, classic cars, are bound to do very well

also never has there been a better time to let 'inflation run hot' and 'rebuild better' perfect excuse.

being cash rich without a diversified investment portfolio is an extremely poor position to be in moving forward, the thing with inflation is nothing happens for ages, then suddenly it happens all at once 

Edited December 20, 2020 by jiltedjen

[Si1]

 

.....and if property prices do not crash it may work out to be a good move, especally if they end of trashing the currency

And if they do then just go bankrupt and job's a good un. Asymmetric risk.

[spyguy]

I think you'll only find its sone banks.

I know HSBC were virtually refuding to hand lians to come if their commercial companies.

A lot if other banks dragged their feet, expecting it would be their neck on the line.

It's going to ge interesting to see which banks and which companies.

My guess it's going yo be the comedy tiny businesses.