Car dealer ordered to repay £40k Covid loan

Will Drysdale, Senior Reporter, Business & Accountancy Daily

A car dealer from Kent has been ordered to repay a second Covid loan in full after not informing the bank he had already received one

Joseph Harrison, 38, from Wrotham in Kent has been banned from acting as a director for 12 years after misleading the bank into granting him a second Covid bounce back loan while the director of South East Commercials car dealership.

As well as being banned from being a company director the Insolvency Service has ordered Harrison to pay the remaining balance of the second loan off in full, which stands at £38,295.

The car dealer who is now living in Spain applied for the company’s first Covid loan of £45,000 in June 2020 but then decided to apply for the same amount in August 2020. Harrison declared this was the only application he had submitted, so the bank approved the loan.

Harrison claimed to be unaware only one Covid loan was allowed per company.

South East Commercials was only incorporated in May 2020, and has now been dissolved owing HMRC £8,320, as well as £74,000 in Covid loans.

Harrison claimed the first bounce back loan was made by a third party on his behalf; however, Insolvency Service investigators found no evidence of a third party’s involvement.

A director’s loan account of £25,000 is also outstanding, but shortly after taking this Harrison applied for the company to be wound up.

Ann Oliver, chief investigator at the Insolvency Service, said: ‘Joseph Harrison applied for and received a second Covid loan when he was only entitled to one for his car sales business.  

‘A 12-year ban is a significant disqualification and demonstrates the seriousness of his actions.  

‘The Insolvency Service is committed to ensuring those who abused this scheme – which was designed to benefit the economy and help small businesses – are brought to justice.’