Tag: Treasury

The press release issued by HM Treasury on 26 January 2023.

Following two separate cases brought by the Insolvency Service, two directors were given suspended prison sentences of 20 months and six months respectively.

Sameer Saeed, 42, from London and Antonia Parkes, 35, from Conwy, have each been convicted for offences under the Companies Act, after being found to have abused the Bounce Back Loan financial support scheme in 2020.

Sameer Saeed was convicted on four counts under the Companies Act and Fraud Act following an Insolvency Service investigation.

Saeed was sole director of Digital Business Box Ltd and The Home Wills Ltd. In relation to the former, he secured a £50,000 Bounce Back Loan based on inflated turnover, and applied to dissolve the company two weeks later. In relation to the latter, he attempted to secure a £50,000 Bounce Back Loan although the company had only been established on 31 March 2020 and was therefore not eligible for any funding through the scheme. He did not receive the funds, but his attempt to secure a second loan was deemed an aggravating aspect in court.

He pleaded guilty to offences under the Companies Act as well as fraud offences. Saeed was sentenced at Snaresbrook Crown Court on 21 December 2022 to 20 months imprisonment, suspended for 18 months, and 300 hours of unpaid work. He has undertaken to repay the £50,000 Bounce Back Loan to the bank.

In a separate case, Antonia Parkes was convicted of an offence under the Companies Act.

She was director of Conwy Valley Lodge Ltd, which ran a hotel close to Snowdonia in Wales. The company situation deteriorated after the start of the pandemic, and she sought financial assistance from the government. Through the Bounce Back Loan scheme, genuine businesses impacted by the pandemic could take out interest-free loans of up to £50,000.

The Insolvency Service investigation found that Parkes had secured a £20,000 Bounce Back Loan, immediately before she applied to dissolve the company.

The striking-off application to dissolve the company was explicit that interested parties and creditors, such as a bank with an outstanding loan, must be notified within seven days of making an application to dissolve a company. The form also highlighted that failure to notify interested parties is a criminal offence, however Parkes did not heed this warning.

She was sentenced on 14 December 2022 at Llandudno Magistrates Court to 26 weeks’ imprisonment suspended for 12 months, with an unpaid work requirement of 120 hours.

Julie Barnes, Chief Investigator at the Insolvency Service, said:

In each of these two cases the company directors thought they could abuse the rules to exploit a scheme, backed by taxpayers, designed to help businesses get through the pandemic.

We will not hesitate to prosecute these cases, and they both now have criminal convictions as a consequence of their actions.

The press release issued by HM Treasury on 26 January 2023.

Mathius Thompson, 33, from Birmingham, Moira Wood, 47, from Lightwater, Guildford, and Ioan Adrian Mociar, 35, from Harrow have been banned for a total of 30 years after separate investigations found they had abused the Bounce Back Loan scheme during the Covid-19 pandemic.

Mathius Thompson was the sole director of West Midz Cars Ltd in Ladywood, Birmingham. In May 2020 he applied for a Bounce Back loan of £50,000 for his used car dealership.

Bounce Back Loans were a government scheme to help keep businesses afloat during the Covid-19 pandemic. Under the rules of the scheme, companies could apply for loans of up to 25% of their 2019 turnover, up to a maximum of £50,000. All loan money had to be used for the economic benefit of the business.

Thompson stated in his loan application that the dealership’s turnover for 2019 was around £287,500, and received the maximum £50,000 loan for the company. But the business went into liquidation in August 2021 owing £53,500, including the full amount of the Bounce Back Loan, which triggered an investigation by the Insolvency Service.

Investigators discovered that West Midz Cars Ltd’s turnover in 2019 had been just over £2,500 and the company’s bank statements for that year show no income or trading activity, meaning the business had not been entitled to a loan.

The company accounts also showed no evidence that the money had been used for the economic benefit of West Midz Cars. A compensation order of £50,000 is now being sought, to repay the loan provider.

Moira Wood, who was sole director of her IT consultancy, Clockwork Compliance Services Ltd, in Guildford, Surrey, applied for a £24,000 Bounce Back Loan for her company in September 2020. The business went into liquidation in February 2022, owing £55,800, including the full amount of the loan, and triggering an Insolvency Service Investigation.

Investigators discovered that Wood had transferred £23,400 to herself between October 2020 and January 2022, just before the company folded, with no evidence that the money had been used for the benefit of Clockwork Compliance Services.

And Ioan Adrian Mociar, who was sole director of Midi Construction Ltd in Pinner, Harrow, applied for a £41,000 Bounce Back Loan for his building company, after stating on the application that the business’s turnover in 2019 had been £166,000. Under the rules of the scheme, if a business began trading after 1 January 2019, the estimated annual turnover could be used.

When Midi Construction Ltd went into liquidation in December 2021 with debts of around £46,000, including the full amount of the loan and almost £5,000 owed to HMRC, it triggered an investigation by the Insolvency Service.

Investigators found that as the building company had only begun trading in June 2019, accounts showed that its turnover for the year ending 31 May 2020 was around £45,500. Midi Construction had therefore received around £29,600 more than it was entitled to under the rules of the loan scheme.

They also discovered that payments of more than £39,700 had been made from Midi Construction Ltd’s bank account during a three-week period between October and November 2020, without any evidence to show that they were for the economic benefit of the company.

The Secretary of State for Business, Energy and Industrial Strategy accepted disqualification undertakings from the three directors after they did not dispute that they had caused their companies to either:

• provide misleading information to a bank to obtain a Bounce Back Loan when they knew or ought to have known that their business was not eligible for a loan of the amount claimed
• and/or not provide evidence to show that payments from the company bank accounts were used for the economic benefit of the company.

Ioan Mociar’s disqualification runs for 11 years from 6 January 2023. Moira Wood is banned for 8 years from 30 January 2023, and Mathius Thompson is banned for 11 years, also from 30 Jan 2023.

The disqualifications prevent them from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court.

Tom Phillips, Assistant Director of Company Investigations at the Insolvency Service, said:

The Bounce Back Loan scheme was designed to support businesses in genuine need. These three company directors abused taxpayers’ money to either apply for loans to which they weren’t entitled, or by failing to show that the money they claimed had been used to support their companies.

They have been removed from the corporate arena for a total of 30 years, and their disqualifications should serve as a reminder to others that the Insolvency Service will take action to protect the public and the taxpayer.

• West Midz Cars Ltd traded as a used car salesroom at Great Tindle St, Ladywood from its incorporation in January 2016 until it went into liquidation in August 2021.
• Clockwork Compliance Ltd traded as an IT consultancy firm in Guildford from its incorporation in January 2018 until it went into liquidation in February 2022.
• Midi Construction Ltd traded as a building company in Pinner, Harrow from its corporation in in May 2019 until it went into liquidation in December 2021.

The press release issued by HM Treasury on 13 January 2023.

The Government has today (13 January) launched a consultation to simplify the UK’s R&D tax relief system, drive innovation and grow the economy.

The press release issued by HM Treasury on 12 January 2023.

HMRC has today revealed that more pensioners filed a tax return for the 2020 to 2021 tax year compared to young people.

Overall, those aged 65 and over accounted for 16% of individuals who submitted a tax return, whereas 16 to 24 year olds made up 2.7% of total filers.

The new data is part of analysis by HMRC into the demographic data of the Self Assessment population. The findings also show:

• people aged 45 to 54 were the largest group of filers, accounting for 24% of all tax returns submitted
• more than 294,000 16 to 24 year olds filed a return, making up 2.7% of total filers
• 62% of those who submitted a return last year were men, compared to 38% who were women

The data also showed that almost 146,000 people submitted their tax return at the earliest opportunity between 6 and 11 April 2021.

More than 12 million people are expected to file a Self Assessment tax return for the 2021 to 2022 tax year. Anyone yet to submit theirs has until 31 January to complete it, pay any tax owed or set up a payment plan, or risk having to pay a penalty.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

Time is running out for anyone who has yet to start their tax return – there is a wide range of guidance and webinars available online for those who need a helping hand. Just search ‘Self Assessment’ on GOV.UK to make a start.

Payments are also due on 31 January and customers still have time to decide which payment option is best for them. For customers who are due a refund, they should include their bank account details in their tax return so that if HMRC needs to repay them, it can be done quickly and securely.

The press release issued by HM Treasury on 11 January 2023.

Darren Richard Baker, based in Coventry, has been disqualified as a director for 7 years after he wrongfully took out a £45,000 Bounce Back Loan on behalf of his charity in October 2020. He then secured a further £5,000 top-up for the charity in March 2021.

Baker was director and chair of The Leanne Baker Trust, a charity set up to campaign to support people struggling with their mental health.

The charity was established in 2014 but went into liquidation in September 2021.

Although charities were eligible to apply for financial support during the pandemic through the Bounce Back Loan scheme, The Leanne Baker Trust had no overheads or employees.

Baker stated that the charity’s turnover was £200,000 in order to secure the Bounce Back Loan, yet its annual accounts showed a maximum turnover of £26,029 for the calendar year 2019. Under the rules of the scheme, the charity was therefore not eligible for the funding.

Having received the funding, Baker did not use the money to support the charity, but instead used over £25,000 to pay off personal legal fees, and a further £13,000 for personal use.

The Liquidator reported the Bounce Back Loan misuse to the Insolvency Service when the charity went into liquidation, and has subsequently recovered the full amount.

The Secretary of State for Business, Energy and Industrial Strategy accepted a disqualification undertaking from Darren Baker, after he accepted that he caused The Leanne Baker Trust to obtain a Bounce Back Loan that it was not entitled to. His ban is effective from 15 December 2022 and lasts for 7 years.

The disqualification undertaking prevents him from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.

Rob Clarke, Chief Investigator at the Insolvency Service, said:

Bounce Back Loans were offered to businesses that had been negatively impacted by the pandemic, with the money purely to be utilised for the economic benefit of those companies; safeguarding jobs and sustaining entrepreneurial activity. That clearly was not the case in this instance where the funds have been claimed by a charitable enterprise, with negligible turnover, and no employees.

Despite the humanitarian purpose of the trust as established, Darren Baker took advantage of the support available during this difficult time for his own personal gain. His disqualification should serve as a warning to others that the Insolvency Service will take action whenever a director’s dishonesty threatens loss to the public purse, the consequence being a lengthy exclusion from trading with the benefit of limited liability.

The press release issued by HM Treasury on 11 January 2023.

HM Revenue and Customs (HMRC) is changing the way taxpayers who use a repayment agent can receive overpaid tax to protect them and raise standards among repayment agents.

HMRC will introduce legislation to change the way repayment agents are paid for their services and better protect customers from the unscrupulous tactics used by some operators. This means stopping the use of legally binding ‘assignments’ as part of claiming an Income Tax repayment, which could only be cancelled if the agent and taxpayer both agreed to do so. This can be challenging for customers who become dissatisfied with their agent, or who simply wish to take over managing their own claim.

Under new arrangements, if a taxpayer chooses to use a repayment agent to reclaim overpaid tax and wants it sent to the agent, they will need to make a nomination, which they can cancel at any time. The new process will make it easier for taxpayers to stay in control of their repayments.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:

Taxpayers deserve better – we want to make sure they are better protected before choosing to enter into an agreement with a repayment agent. HMRC’s updated standards for agents will level the playing field and provide the benchmark we expect all repayment agents to meet.

The changes follow HMRC’s consultation last summer on ‘Raising standards in tax advice: Protecting customers claiming tax repayments’. Responses to the consultation highlighted the need to improve agent transparency and standards with the overall aim of better protection for taxpayers.

As a result, HMRC is today also setting out the following measures:

• updated standards for agents – applicable to all tax agents and include greater transparency requirements
• a new HMRC registration process for repayment agents – to make the agent sector more transparent so customers better understand what they are signing up to

Victoria Atkins, Financial Secretary to the Treasury, said:

For too long taxpayers have been left in the dark as a result of misleading and opaque agreements with repayments agents. These new measures will ensure those who are entitled to claim a tax repayment or relief can do so freely and easily – whether they choose to do this themselves or by using an agent.

This government is making it easier to navigate the system for all taxpayers using an agent to claim money that’s owed to them.

Victoria Todd, Head of the Low Incomes Tax Reform Group, said:

We welcome these additional steps, which show HMRC recognises the important role they play in consumer protection. Refund companies have a legitimate role in the tax system, but the practices of some of these companies in recent years have been unacceptable. The proposed changes will hopefully address problems around the use of assignments, increase transparency for taxpayers and set clearer standards for these companies’ behaviour.

Alongside this, it is important that more effort goes into raising awareness of refunds and ensuring it is as simple as possible for taxpayers to access them. We look forward to working with HMRC on the detail of the proposals.

These changes form part of the government’s commitment to tackle problems in the repayment agent market, which is currently an unregulated sector.

Responses to HMRC’s recent consultation overwhelmingly supported the need for improving standards in the repayment agent sector. The updated HMRC standard for agents includes:

• greater evidence of customer consent – this aims to ensure that taxpayers better understand the agreement they’re entering into
• stricter transparency rules, including introducing a 14-day ‘cooling off’ period for customers after entering into an arrangement with an agent, and an obligation on agents to ensure all communications and advertising material are fair, clear, accurate and do not mislead or conceal material facts

Further details on the approach to registration for repayment agents will be set out in due course.

If taxpayers think they are owed a tax rebate, they can claim directly from HMRC via the free and secure service on GOV.UK and will receive 100% of the money owed.

The press release issued by HM Treasury on 10 January 2023.

The press release issued by HM Treasury on 10 January 2023.

Secretary of the Treasury Janet L. Yellen’s Meeting with Finance Ministers from Australia, Canada, New Zealand, and the United Kingdom.

WASHINGTON – U.S. Treasury Secretary Janet L. Yellen chaired a meeting of the “Five Finance Ministers” which includes Australia, Canada, New Zealand, and the United Kingdom. The ministers shared perspectives on global economic challenges and reflected on the distinct challenges stemming from Russia’s illegal and unprovoked war against Ukraine. The ministers also discussed the need for cooperation to respond to the threat and use of economic coercion.

Secretary Yellen underscored the importance of close collaboration among partners and allies to secure our economies and develop greater resilience against global supply chain disruptions caused by Russia’s war, the ongoing effects of the COVID-19 pandemic, and other factors. The ministers look forward to future engagements and reaffirmed their commitment to deepen cooperation to further shared priorities in the Indo-Pacific and beyond.

The press release issued by HM Treasury on 9 January 2023.

• Scheme will provide a discount on high energy costs to give businesses certainty while limiting taxpayers’ exposure to volatile energy markets
• Businesses in sectors with particularly high levels of energy use and trade intensity will receive a higher level of support.

A new energy scheme for businesses, charities, and the public sector has been confirmed today (9th January), ahead of the current scheme ending in March. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on high energy bills until 31 March 2024.

This will help businesses locked into contracts signed before recent substantial falls in the wholesale price manage their costs and provide others with reassurance against the risk of prices rising again.

The government provided an unprecedented package of support for non-domestic users through this winter, worth £18 billion per the figures certified by the OBR at the Autumn Statement. This is equivalent to the cost of an increase of around three pence on people’s income tax.

The government has been clear that such levels of this support, unprecedented in its nature and huge scale, were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.

The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion. This provides long term certainty for businesses and reflects how the scale of the challenge has changed since September last year.

The Chancellor of the Exchequer, Jeremy Hunt, said:

My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.

Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.

Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.

From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.

A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries. A long standing category associated with higher energy usage; these firms are often less able to pass through cost to their customers due to international competition. Businesses in scope will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.

Energy Bill Discount Scheme summary

For eligible non-domestic customers who have a contract with a licensed energy supplier, the government is announcing the following support:

• From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
• This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.
• Customers do not need to apply for their discount. As with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

For eligible Energy and Trade Intensive Industries, the government is announcing:

• These businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.
• The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity.
• This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89.1/MWh for electricity.

The Chancellor has also today written to OFGEM, asking for an update in time for the Budget on the progress of their review into the non-domestic market. He has asked for their assessment of whether further action is action is needed to secure a well-functioning market for non-domestic customers following reports of challenges certain customers are facing, including in relation to the pricing and availability of tariffs, standing charges and renewal terms, and the ability of certain sectors to secure contracts.

Businesses in England will also benefit from support with their business rates bills worth £13.6 billion over the next five years, a UK-wide £2.4 billion fuel duty cut, a six month extension to the alcohol duty freeze and businesses with profits below £250,000 will be protected from the full corporation rate rise, with those making less than £50,000 – the vast majority of UK companies – not facing any corporation tax increase at all.

The press release issued by HM Treasury on 9 January 2023.

David Woodward has been appointed as a non-executive director to the board of the National Savings & Investments bank (NS&I), the Economic Secretary announced today.

David’s three-year term officially began on 3rd January 2023. He began his career as a qualified accountant and has worked in senior roles in the private, public and charity sectors.

His executive career has seen him work in senior finance positions successfully delivering strategic change within large and complex businesses.

Economic Secretary to the Treasury, Andrew Griffith said:

I’d like to welcome David to his new role. His experience in customer-facing businesses will bring a unique perspective to the NS&I board, and ensure the organisation continues to deliver new and innovative services at the nation’s savings bank.

In 2008, David commenced his non-executive career, and he has over 10 years of financial services experience and over 5 years working with community and hospital NHS Trusts. He is an experienced audit committee chair. He is also currently a Non-Executive Director on the Board of the Hinckley and Rugby Building Society, and he will complete his final term on the Board in March 2023.

David is also a Trustee of the charity the Consumers’ Association and an Independent Committee Member of the Finance and Estates Committee for Trent.