Self Employed, closing business.

dantek

Sorry if this is in the wrong area.

I am a self employed driver, but I am finding it increasingly hard to find work, so I think I may have to close up.

My question is this:
I have a business account in the red by around £4k
I have been trading for 3 years and last year was a good year, and I was starting to recover my startup costs, but then, bang, recession hits and my work drops right off. since xmas work has been on a steady decline.
I have a tax bill of around £3k to pay in jan (this includes NI)

If I shut up shop, then obviously i'll have no income to pay overdraft or tax bill, but I cant really afford to carry on, as I'll just get deeper into debt.

What can I do?

Thanks

Hammyman

Firstly are you a sole trader or Ltd company? If you're a Ltd company, you wind the company up and walk away debt free assuming you've not been stupid enough to either get overdraft/credit in your name or act as a guarantor. If you're a sole trader, you simply ring up HMRC and tell them you're no longer self employed. You'll still have the tax bill to pay if you're a sole trader however losses from this year can be offset against previous years profits, thus possibly reducing the tax bill due - I think in this respect, an hour with an accountant would be of immense benefit to you.

Don't forget the income from disposal of assets (any company vehicles, office equipment etc) will be counted as income.

Income tax debts can be included in IVA and bankruptcy if you choose that route however you may find that if you contact them now and tell them you have a problem, rather than 31st January, they may be sympathetic and put a payment plan in place.

dantek

sole trader.

Year to date I have earned about £2k, no assets as such to sell, van is on a rental.
One of the problems I've had is the price of a creche for my 5 yr old, to enable me to work,
but I cant deduct that cost from tax bill can I?
When at school its around £70 and in the summer hols it will be at least £130 a week, so this obviously puts a huge
strain on the finances.

With my van rental, insurances etc added to the creche, I have to earn over £230 a week just to draw even!
hence why I'm thinking of hanging my keys up.
problem is, what to do for work....

Hammyman

Are you not claiming the child care costs through Child Tax Credits? Are you claiming working tax credit and if so, have you told them of the drop in income for this year?

dantek

Last years income was greater than thought so I dont qualify for working tax credit this year, or child care.
Even if I tell them about drop in income, it wont make a difference will it, because they overpaid last year??

dantek

bumperty bump

Aspiring_Writer

Dan, what work have you been doing? same day parcel stuff? my sympathies if so. I told a client of mine last year to get out while he could, but he didnt until he went bust. I later found out he was losing £500 ...A DAY! Mental

Do you have any HGV entitlement on your licence? there are Class 2 & 1 jobs going at the moment. If you havent got the licence though its more money isnt it?

Aspiring_Writer

I have just clocked the dates and your last post...has it gone tits up then?

dantek

just about,
I have my LGV class one, but not used it for about 6 years.
Dont have a digicard (not a prob, about £25 I think)
But I dont have my CPC which is a requirement now.

PULLY_2

dantek wrote: »

just about,
I have my LGV class one, but not used it for about 6 years.
Dont have a digicard (not a prob, about £25 I think)
But I dont have my CPC which is a requirement now.

you don't need a cpc to drive,because of the length of time you have had your licence you have obtained it under grandfather rights,although you will need to undertake training in the future as it only lasts for 5 years,register with as many agencies as possible,their is plenty of work out there if your willing to work,but stay away from the back office tax club (umbrella companies) a waste of time!!! hope this helps..