Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Pmhplumb
    • By Pmhplumb 13th Oct 16, 9:56 PM
    • 2Posts
    • 1Thanks
    Pmhplumb
    In serious trouble, advice pls!
    • #1
    • 13th Oct 16, 9:56 PM
    In serious trouble, advice pls! 13th Oct 16 at 9:56 PM
    Hi,
    First time posting on a forum so not sure if it's in the right place!
    Anyway....
    I've got myself into a pretty awful situation and have come to realise it's time to deal with it and stop burying my head in the sand.
    I'm a self employed plumbing and heating engineer and started on my own 9yrs ago. My money management wasnt and still isn't great. About 4 years ago I entered an IVA as I had developed a debt of about 30k which was primarily business related. I struggled to keep on top of repayments as i had a bad year for earnings and thought it was the best solution at the time. I have never missed a payment to my IVA practitioners.
    Initially I had a tax break and even a rebate from hmrc. I then proceeded to have a good year for earnings (about 35k) but didn't put any aside for tax savings. Needless to say I was hit with a tax bill I couldn't afford so I started burying my head in the sand till now. I currently owe just under 20k to hmrc.
    I'm now in a position where I could do with expanding my business, I'm very busy and turning work away. But I want to sort my affairs first.
    I'm not, unsurprisingly, in a position to pay off that sort of money. I cant/won't borrow to pay it off. Robbing Peter to pay Paul got me in financial difficulties originally.
    I don't own a home and have very few assets, eg I have a van and tools.
    I've been fortunate that my partner has a high enough income to support both of us, so buying household things has never been a priority to me. But to top it all off I never seem to have any spare money to put to one side, there is always some bill that needs paying.
    I'm scared to contact hmrc as I don't want to lose my business.
    I'm going to be making changes in the running of it to prevent all this happening again but how can I get out of this mess? Any advice would be great.
    Thank you.
Page 1
    • Pinkwhisk
    • By Pinkwhisk 13th Oct 16, 10:34 PM
    • 150 Posts
    • 392 Thanks
    Pinkwhisk
    • #2
    • 13th Oct 16, 10:34 PM
    • #2
    • 13th Oct 16, 10:34 PM
    Hi,

    Business debt line will be the best people to advise you on this - 18.23 they are national debt lines sites company.

    Are you still in IVA? Try talking to them if you are to see if they have any advice for you, but I know for sure business debtline will have advice for you

    P W
    LMB July 2015 Jointly owe £14745.30

    SPC10 = #563 any money saved goes to Christmas 2017 🎅 🎄🎁🎉

    A pound a day for Christmas 2017 = #4 31/356 🎄🎁🎉🎅
    • Pmhplumb
    • By Pmhplumb 13th Oct 16, 11:02 PM
    • 2 Posts
    • 1 Thanks
    Pmhplumb
    • #3
    • 13th Oct 16, 11:02 PM
    • #3
    • 13th Oct 16, 11:02 PM
    Thanks for your reply, yes I'm still in my iva. Think I've got another year left. As far as I'm aware I can't add hmrc debt to it.
    I've been advised by everyone to save for tax bills but it's hard when all my money goes out as quickly as it comes in.
    • EssexHebridean
    • By EssexHebridean 13th Oct 16, 11:18 PM
    • 6,357 Posts
    • 35,120 Thanks
    EssexHebridean
    • #4
    • 13th Oct 16, 11:18 PM
    • #4
    • 13th Oct 16, 11:18 PM
    You need to start siphoning off the tax/NI money as you get paid - work out roughly what percentage you need to allow given the bits you offset against it, add 3% on for safety and put that straight into another account as soon as invoices are paid. The mindset I used right from the start was that this was not my money - therefore spending it was stealing. it worked for me.

    I wonder whether you can convert the standard SOA that is usually used for household budgets on here for business use? Might be worth a look - the link is in the sticky post at the top of this board.

    You're absolutely right that you need to tackle this now - and those who've advised Business Debt Line are spot on. Good luck.
    MORTGAGE FREE 30/09/2016
  • National Debtline
    • #5
    • 14th Oct 16, 9:38 AM
    • #5
    • 14th Oct 16, 9:38 AM
    Hi

    I agree with the others that you need to take advice from Business Debtline. TaxAid might also be useful for you.

    http://taxaid.org.uk

    Business Debtline have a budget template which may be more suitable for you than the standard SOA:

    www.businessdebtline.org/EW/steps/step2/Pages/Step_2_30-budget-sheet.aspx

    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • enthusiasticsaver
    • By enthusiasticsaver 14th Oct 16, 9:51 AM
    • 2,564 Posts
    • 4,374 Thanks
    enthusiasticsaver
    • #6
    • 14th Oct 16, 9:51 AM
    • #6
    • 14th Oct 16, 9:51 AM
    If you are spending money out as fast as it comes in even though you don't pay household bills and are working flat out then a couple of things to check.

    What is your credit control system like? - invoicing, chasing payments etc

    Are you charging enough? Compare your prices with other plumbers in your area.

    You should be putting money away not only for tax but also depreciation on assets like your van, equipment etc.

    Are you making efficient use of your time? Taking longer between jobs than necessary?

    Have you approached HMRC to make an arrangement?
    Debt and mortgage free and saving for early retirement
    • enthusiasticsaver
    • By enthusiasticsaver 14th Oct 16, 9:54 AM
    • 2,564 Posts
    • 4,374 Thanks
    enthusiasticsaver
    • #7
    • 14th Oct 16, 9:54 AM
    • #7
    • 14th Oct 16, 9:54 AM
    Apologies I just saw you have not approached HMRC in case you lose your business. I can't see how HMRC would benefit from that and I think ignoring them is going to make it worse. Burying your head in the sand usually leads to suffocation.
    Debt and mortgage free and saving for early retirement
    • Ray Singh-Blue
    • By Ray Singh-Blue 14th Oct 16, 9:49 PM
    • 148 Posts
    • 175 Thanks
    Ray Singh-Blue
    • #8
    • 14th Oct 16, 9:49 PM
    • #8
    • 14th Oct 16, 9:49 PM
    May be relevant, i'm self employed and have a system that works ok. I Keep a monthly spreadsheet of current assets (bank accounts) and current liabilites (money owed including credit cards and projected tax). The number to focus on is net current assets, which is current assets minus current liabilities. I like to keep this figure above a certain level, £20K. If it drops below £20K I know I have to keep an eye on cashflow. If it drops below £0 then I know I have a problem
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

611Posts Today

3,658Users online

Martin's Twitter