A Middlesbrough electrician has been subjected to seven years of tough bankruptcy restrictions after claiming two Covid Bounce Back loans and overstating his turnover to get £16,250 more than he was entitled to.
Sean Dixon, a self-employed electrician from Leamington Grove in Middlesbrough, claimed Bounce Back loans totaling £23,750 for his business in the summer of 2020.
Dixon was declared bankrupt in November 2023, and the official receiver, whose role includes investigating the cause of the bankruptcy, found that Dixon had claimed two separate loans — a violation of the bounce-back loan scheme.
The investigation also concluded that Dixon exaggerated his turnover in his second application to claim additional money to which he was not entitled under the rules of the scheme. The Official Receiver discovered that Dixon had originally claimed a £7,500 bounce-back loan in June 2020, and took out a second loan of £16,250 a month later.
Under the rules of the Bounce Back Loan scheme, businesses can claim up to 25% of their 2019 turnover, up to a maximum loan of £50,000.
Businesses that originally borrowed less than the maximum amount available to them can apply for an additional loan. But the first loan plus top-up must not be more than 25% of their business, as stated in the original loan application. In his second loan application, Dixon overstated his turnover by £43,000, resulting in him taking out a second loan of £16,250 to which he was not entitled.
The official receiver obtained a seven-year bankruptcy restraining bond from Dixon, in which he did not dispute that he provided inaccurate information on the second loan application.
Bankruptcy restrictions now prevent Dixon from acting as a director of the company without court permission and from borrowing more than £500 without declaring he is subject to the restrictions. It also prohibits him from assuming certain roles in public organizations.
Carol Migram, official receiver at the Insolvency Service, said: “Bounce back loans are designed to support UK businesses during one of the most difficult times for the country. Sean Dixon abused this scheme by taking out two loans and exaggerating the turnover of his business to misuse payers’ money. Taxes.
“These lengthy bankruptcy restrictions will limit his financial and business activities and help protect the public from further abuse.”
