Accountants obliged to report suspected misuse of the Bounce Back Loan Scheme

Published on 07 September 2021

The Bounce Back Loan Scheme (BBLS) was introduced to enable smaller businesses adversely affected by the coronavirus pandemic to access government-backed finance.

Under the BBLS, small and medium sized businesses were able to borrow between £2,000 and up to 25% of their turnover.  The maximum loan value that was available was £50,000.  The government guaranteed 100% of the loan and there are no fees or interest to pay for the first 12 months. After 12 months, interest is charged at 2.5% per annum. The BBLS scheme closed for new applications on 31 March 2021.  

There were more than 1.5million Bounce Back Loans (BBL), worth some £47 billion, made between April 2020 and May 20211.   

In order to receive such a loan, a business had to confirm that the loan would not be used for personal purposes but as an economic benefit for the business.  

ICAEW members (whether in private practice or in business) must adhere to the ICAEW Code of Ethics which includes the fundamental principle of integrity. Paragraph R111.2, states:

A professional accountant shall not knowingly be associated with reports, returns, communications or other information where the accountant believes that the information:

  • contains a materially false or misleading statement;
  • contains statements or information provided recklessly; or
  • omits or obscures required information where such omission or obscurity would be misleading.

An accountant must not therefore be knowingly associated with any false or misleading claims for government support.

Accountants must also consider their anti-money laundering obligations. Broadly, they are required to submit a Suspicious Activity Report (SAR) to the National Crime Agency, where information comes to them in the course of their business in a regulated sector, which leads them to suspect that another person is engaged in money laundering.

Although accountants are not required to identify what a BBL was used for, it is likely they will receive this information when preparing their client's accounts.  If accountants consider their clients may have used funds provided through a BBL for personal purposes, for example, transfers to personal accounts or third parties, rapid cash withdrawals, a large jump in dividends and wages, the purchase of new personal assets such as a car or house or multiple loan applications using different business names, they may, depending on the circumstances, have an obligation to submit a SAR.

Should you be uncertain as to your legal and/or professional obligations, we would be happy to advise.


[1] Final Covid loans data reveals £80 billion of government support through the pandemic.

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