Director defence and insolvency risk
Received a Bounce Back Loan or HMRC Compliance Letter?
Directors can face investigation, disqualification risk and personal financial exposure if a Bounce Back Loan is alleged to have been misused. Get advice before you respond.
Do not respond casually
A compliance letter, lender query or Insolvency Service notice can feel like a simple request for information. In practice, the answer you give may shape whether the matter closes, escalates or becomes part of a director disqualification case.
HMRC or lender letter
You may be asked to explain turnover, eligibility, use of funds or repayment history.
Insolvency Service contact
Director conduct, company records and loan use may be examined after insolvency or dissolution.
Turnover and eligibility issues
Rounded, estimated or unsupported figures can become a risk factor if they are not explained properly.
Personal use allegations
Payments to directors, transfers or unclear records need careful evidence and context.
BBL enforcement is still active
The Insolvency Service has continued to report director disqualification action linked to Covid loan abuse. A director may face a public ban, compensation proceedings or personal liability risk depending on the evidence and outcome.
Speak to a SolicitorHow we help directors
- Urgent advice note on the risks, likely next steps and documents needed.
- Response to HMRC, lender, liquidator or Insolvency Service correspondence.
- Evidence review, including bank statements, turnover records and board decisions.
- Mitigation statement where the loan position needs careful explanation.
- Advice on proposed disqualification undertakings and compensation exposure.
- Clear strategy where the company has been dissolved, liquidated or is still trading.
Fixed fee options
| Service | Fixed Fee |
|---|---|
| Urgent advice note within 24 hours where available | From £1,500 + VAT |
| Response to HMRC or lender BBL compliance letter | From £2,500 + VAT |
| Mitigation statement | From £2,000 + VAT |
| Disqualification undertaking advice letter | From £1,750 + VAT |
| Response to Insolvency Service notice | From £3,000 + VAT |
| Full advice and response package | From £7,500 + VAT |
Urgent work depends on document volume and deadline. We will confirm the fixed fee and scope before starting.
What to send us
- The letter or notice you have received.
- The company name and Companies House number.
- The BBL amount, lender and repayment position.
- Any bank statements, turnover records or notes explaining how the loan was used.
Email admin@nalawsolicitors.co.uk with the subject line URGENT BBL, or call 0203 524 5439.
Frequently Asked Questions
What is a Section 16 notice?
A Section 16 notice from the Insolvency Service is a formal step in director disqualification investigations. It usually requires a quick and careful response, so directors should not ignore it or reply casually without advice.
Can the Insolvency Service investigate a dissolved company?
Yes. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 strengthened powers to investigate dissolved companies, including where Bounce Back Loan misuse is suspected.
I used the Bounce Back Loan for the business but it was not repaid. Am I at risk?
Non-payment alone is not the same as misconduct, but the Insolvency Service may look at eligibility, turnover calculations, how funds were used, what records exist and whether the director acted responsibly.
How much does BBL defence advice cost?
Urgent advice starts from £350 plus VAT. More detailed responses to HMRC, lenders or the Insolvency Service are quoted as fixed fees wherever possible before work begins.
Have you received a BBL letter?
Before you respond, let us review the letter and the deadline. We will tell you what the risk is and what should be said next.