Update May 2024

A short update of three topics that we wanted to bring to your attention.

Bounce back loans

At a recent meeting with an Insolvency Practitioner, he raised the issue of bounce back loans and how they are an increasing area of scrutiny in liquidations.

On the back of that, there has been a recent news story about a Chartered Accountant, of all people, who has been banned from being a company director for 12 years for abusing the bounce back loan scheme.

His company entered liquidation in December 2022 when it was discovered that an initial, correct, bounce back loan application was made for a £25,000 loan. However, the accountant subsequently applied for a further £50,000 less than 2 weeks later and then another £50,000 the following month.

He now has a 12 year disqualification from being a company director and has also agreed to pay compensation of £75,000.

A spokesman for the Insolvency Service said “This outcome should be a warning to others that we will be seeking action against cases of abuse by company directors.”

In 2022/23 we understand that 459 out of 932 director disqualifications were due to Covid fraud.

So, if you have a bounce back loan and your company is unable to continue trading, we recommend that you take professional advice from an insolvency practitioner immediately.

Flexible working law

Changes to the law in terms of flexible working came into force on 6 April 2024.

The big change is that employees can make a statutory request for a permanent change to their contract – when, where and how long they work – on day 1 of their employment with you. They no longer need to outline a business case for the request for flexible working.

As an employer you have 2 months to respond and if you wish to reject the application, you must comply with one of the seven stated reasons (as shown here). Employers can also propose a trial period to evaluate any changes before committing to any permanent change.

So, imagine the scenario where your new full time employee arrives at your workplace on day one, having been through a recruitment process that may have involved multiple interviews, and they submit a statutory request to go part time and work from home…

Child benefit

If you previously stopped claiming child benefit because your highest income was over £50,000, you may wish to consider making a claim again with the threshold now rising to £60,000 before any clawback starts. We understand that a claim can be backdated for 3 months.

Even if your income exceeds the thresholds, it may be worth making a claim in order to preserve the national insurance credits for a non working or lower paid spouse/partner.

That’s all for now, but if you wish to discuss further any of the items raised in this email then please do contact us.

The Team at Cleverdons