Companies must suspend dividends and bonuses for extra state support but nothing is said about tax avoidance

Firms can now borrow up to £200m through a business loan scheme but there are strings if they ask for more than £50m, James Moore writes

Treasury minister Jesse Norman: ‘Where businesses fail to meet their tax obligations, HMRC challenge them using their compliance powers’ (EPA)

Addressing some of the criticisms of its business support measures, the government has confirmed plans to offer state-backed loans of up to £200m through its coronavirus large business interruption loan scheme – four times the previous limit.

But the extra money being made available comes with strings. Companies borrowing more than £50m will be blocked from paying dividends, buying back shares or splurging on bonuses to senior management (unless previously agreed) until the money is repaid.

The restrictions will also apply to to larger companies wanting to borrow for more than a year through the covid corporate financing facility run by the Bank of England.