Business Expenses

fish89

Hi all,

I have recently started an IVA but my job in sales comes with a company car and all associated business costs. I earn an absolute pittance (£18k) and get a bonus once a year. I suspect it to be about £2k this year but work currently owe me £1k in expenses and I am struggling.

Under the 10% rule is there likely to be an exception to allowing me to keep my bonus? With a child growing and another on the way I am struggling to make ends meet and can't get a well paid job despite trying! In the last 2 years our household income has reduced over £10k and a new mouth has needed feeding. I could really do with using my bonus as a credit facility as waiting this long for expenses is making things too difficult. Once I get the £1000 I owe my dad £240, nursery £170, some money for bills and then I have a £300 car bill to pay and claim back.

I enjoy my job but getting to payday with enough fuel at the minute is a scientific operation. I pay £130 into an IVA and can't consider bankruptcy as I have a mortgage.

DorisTrousers

Does your IP know that you get a bonus annually? You have an argument to suggest to your IP that this extra income is spread over the full 12 months.

So 2k less tax, lets say 1500 net rough figure, so 125 per month. That would be pretty much exempt under the 10% rule, so you would lose nothing.

With an IVA of course, each proposal is different so refer to your own first. If they have calculated your income including your expenses, or offsetting those against expenditure, then you shouldn't lose that either when it does come through.

Max_Maxwell

Firstly, your expenses are not classed as income. These are costs you have incurred whilst carrying out your job and not considered under your IVA. Your employer is not treating you fairly if they are withholding £1,000 worth of expenses and you need to make some noise about it. It's not fair to you as you are subbing your company although neither is it your IPs issue that you employer hasn't reimbursed you. They may be sympathetic for a while and give you some breathing space if you raise it with them.

With regards your bonus payment, I would be surprised if this fell under the 10% rule. Typically, a windfall such as this falls under the 50/50 rule which means you share it equally with your IP. You need to be clear about this otherwise you may find yourself having to make hefty back-payments later on. Discuss it with your IP, it's always better to have open and honest dialogue with them.