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IVA and Self Employed

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  • the_bright_side
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    How much 'working capital' is allowed before it is classed as profit anyway?? Currently I have VERY little.
    My accountant knows my situation so will have to ask him on my next visit.

    Thats exactly my point. My last LTD company went bust because I wasnt paid by a supplier, I then used up my working capital and my credit cards to survive and now Im in an IVA. If I had retained more working capital / assets then it may not of happened
  • SunshineBear
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    I have now realised that there are 2 parts to my accounts, Profit and Loss page which includes assets and capital and the other which is personal drawings. I guess the trick is to have as much working capital as posible. They only wanted info on my personal drawings ie. what the tax office taxes me on.

    As with your situation I'm having to try to chase up payents. Currently half my monthly turnover is owed me by various customers. Some who have point blank refused to pay. I sat outside a (second) house today as a couple were happily gardening, they owe me money but refuse to pay. I decided not to confront them. rather keep my inner peace. It's just really annoying that this year yet again I will have to write off bad debts from people who can clearly afford it. Like yourself this is affecting my own ability to pay myself.
  • Cat1
    Cat1 Posts: 128 Forumite
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    I have now realised that there are 2 parts to my accounts, Profit and Loss page which includes assets and capital and the other which is personal drawings. I guess the trick is to have as much working capital as posible. They only wanted info on my personal drawings ie. what the tax office taxes me on.

    Hello! My OH is self employed & also PAYE and just about to go down the IVA route too

    Your accounts will be made up of a profit and loss account (this shows the income and expenditure) and a balance sheet which shows assets and liabilities.

    You can take whatever amount you chose from the business as drawings but when accounts are prepared for HMRC, drawings are added back into the pot and you are taxed on the net profit figure (turnover less expenses = net profit /loss). I'm sure the IP will understand the need for some working capital otherwise the business will fold at the first sign of trouble and then BR may be the only option.

    I'm really not looking forward to digging out all the paperwork this weekend and trying to forecast profits on what is such a small business :(
  • Markv
    Markv Posts: 5 Forumite
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    Hi, i'm self employed and considering taking out an IVA. I wonder if any of you can tell me how you are doing your business banking now that you have an IVA. I have spent days trying to find a bank, with no joy, that will let you have a business banking account after taking out an IVA.
    Does anyone know of any banks that will allow a sole trader with an IVA to open an account??
  • the_bright_side
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    I went to Natwest told them the situation, went with a business plan, profit and loss statement and they gave me a bank account
  • Markv
    Markv Posts: 5 Forumite
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    Thanks the_bright_side, i guess there's always hope, although at the moment that seems in very short supply..
  • SunshineBear
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    Markv wrote: »
    Hi, i'm self employed and considering taking out an IVA. I wonder if any of you can tell me how you are doing your business banking now that you have an IVA. I have spent days trying to find a bank, with no joy, that will let you have a business banking account after taking out an IVA.
    Does anyone know of any banks that will allow a sole trader with an IVA to open an account??

    TBH my IVA has not started and I don't intend to tell my bank, I owe them nothing on it and never have and was told that they didn't need to know. If I have to close it down I will get customers to pay with personal cheque.
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