The Covid inquiry isn't the only brutal hangover from the pandemic to give contractors a rude awakening this month. In fact, as of November 2025, enforcement against limited company directors who seemingly misused coronavirus income support schemes continued — and then some, writes Gareth Wilcox of Opus Business Advisory Group.
Remind me, what were Bounce Back Loans?
The Bounce Back Loan Scheme (BBLS) was launched by the government in 2020.
The scheme aimed to support small businesses during the pandemic. And it served as a much-needed lifeline for many personal service company (PSC) directors.
Bounce Back Loan misuse, how come?
Offering up to £50,000 per business at low interest, the BBLS relied on self-certification, carried no personal guarantee, and came with only minimal checks to expedite funds.
Unfortunately, these three aspects of the scheme left the door wide open for abuse. Fast forward to 2024–25, and the Insolvency Service and Crown Prosecution Service (CPS) have significantly ramped up enforcement.
What punishment for BBL misuse looks like
In fact, in return for abuse of the BBLS, and the similar Coronavirus Business Interruption Loan Scheme (offered to larger businesses), hundreds of directors now face:
- Directorship Disqualifications (i.e. bans on being a limited company director)
- Financial Compensation Orders (and, in some cases, even)
- Prison Sentences.
The scale of Covid loan misuse and misconduct
Fresh figures underline the severity of Covid loan misuse and misconduct.
In the 2024–25 financial year, 736 directors were disqualified for Covid loan abuse, representing the majority of over 1,000 bans issued by the Insolvency Service.
The average disqualification period was eight years, with some directorship bans stretching to 13 years — the upper limit being 15 years for the most egregious cases.
What enforcement measures from the Insolvency Service?
Enforcement measures to date against Covid loan-misusing directors have included:
- Winding-up orders
- Bankruptcy restrictions
- Compensation demands
- Criminal prosecutions.
Like operating in a niche, talent and celebrity provide no immunity
Several Insolvency Service prosecution cases from the past 12 months illustrate the severe consequences of misusing taxpayer-backed funds.
For ContractorUK, and out of those. I've selected just nine limited company directors who memorably crossed the line.
Their punishments for misdeeds with Covid loans, grants and income support initiatives show that your chosen industry, talent or skills, being 'hidden' in a niche sector, and even having a high profile, all provide no barrier whatsoever to Insolvency Service enforcement.
Nine directors who misused Covid loans & how they paid a punishing price
- Mohammed Uddin (Construction): Uddin fraudulently applied for five Bounce Back Loans worth £250,000 across multiple companies. Instead of supporting his businesses, he splurged on luxury watches, cars, and home improvements. Convicted of five counts of false representation, he was jailed for 28 months and banned as a director for five years.
- Anna Daroy (Management Consultancy): A former interim Director General of the Institute of Directors, Daroy secured two £50,000 loans for her consultancy, despite the scheme allowing only one. When her company later collapsed, both loans remained unpaid. She accepted an 11-year disqualification.
- Tahir Haq (Building Completion): Building contractor Haq overstated his company's turnover by nearly £200,000 to claim the maximum £50,000 loan, when he was entitled to just £3,000. He failed to show the funds were used for business purposes, with some payments traced to a housing scheme in Pakistan. The High Court imposed an 11-year ban and ordered him to repay £46,778 plus interest and costs.
- Romain McLean (Management Consultancy): McLean admitted he 'wanted to get as much money as he could', applying for two loans totalling £80,000 by inflating turnover figures. He agreed to an 11-year ban and a £60,000 settlement repayment.
- Ruxandra Guja (Specialised Construction): Guja's decorating firm secured three loans totalling £145,000, far exceeding the £50,000 cap. The High Court handed down a 13-year director disqualification and ordered her to repay over £100,000 plus costs.
- Ricky Harrison (Education): Harrison fraudulently claimed £200,000 through four loans for dormant companies, then used the money for personal purchases, including an £85,000 vehicle. He was sentenced to three years and two months in prison and banned for 10 years.
- Junaid Dar (Fitness/Leisure): Dar made fraudulent applications to three separate banks for Bounce Back Loans worth a combined total of £45,500 during 2020 for his JDARPT Ltd fitness company. He spent part of his Covid loan funds at safari park restaurants and paying off personal credit card debt. This misuse led to Dar being sentenced to 20 months in prison, suspended for 18 months. He was also ordered to complete 20 days of rehabilitation activity, 180 hours of unpaid work, pay costs of £2,400 and was banned from being a director for 11 years.
- Rick Beardsell (Sportswear Manufacturing): A former world sprint champion was sentenced to 18 months in prison, suspended for two years, after using a £100,000 Covid loan to help buy a £1.3 million home. He was also ordered to complete 250 hours of unpaid work and pay costs of £11,152, despite having repaid the funds in full before sentencing.
- Peter Connelly (Sound Recording/Music Publishing): The composer behind the Tomb Raider video game soundtrack was jailed for 16 months and disqualified from being a director for six years. This was for obtaining a second BBL of £37,500.
Why contractors shouldn't ignore these ignoble nine
For a contractor who is operating through their own limited company, these ignoble nine directors should serve as a sobering reminder:
Covid support funds were not free money.
Misuse — whether through inflating turnover, making multiple applications, or diverting funds for personal use — can lead to severe consequences, even years after the pandemic.
Company closure can be an open door to an Insolvency Service Covid investigation
Be aware if you're a contractor closing your company.
Insolvency practitioners have a duty to retrospectively scrutinise the use of Covid support schemes and conduct during liquidations.
Directors found guilty can face personal liability, disqualification, and even criminal charges.
What if a director is caught pocketing Covid cash?
The Insolvency Service has made Covid loan abuse a top priority, with enforcement outcomes rising sharply — it's up 80% year-on-year.
Criminal prosecutions, while less common than director disqualifications, are increasing.
And compensation orders are being used to claw back millions for taxpayers.
Bounce Back Loans: Three key conditions of contractor usage
To recap, three key points to remember regarding loans from the BBLS (Bounce Back Loan Scheme) were:
- One loan per business: Multiple applications breach the scheme rules.
- Use was for business benefit only: Personal spending is prohibited.
- Record-keeping matters: Poor documentation, for example, the inability to evidence turnover requirements or profits to demonstrate the legality of dividends, can compound liability.
Finally, contractors, don't be the next Haq, Dary or McLean…
As Mr Haq would no doubt tell you, director disqualification can be career-ending for a contractor.
And as Ms Daroy and Mr McLean would no doubt tell you, being banned as a director can be career-ending if you're a consultant.
While the government continues its crackdown on Covid loan abuse, directors should seek professional advice early if facing financial distress or potential compliance issues. It is far, far, far better to confront matters head-on, rather than wait for the letter to land or an inspector to call.
