Changing to self employed

[Cawkers]

Hello

Anyone know what would be involved in changing from employment to self employment during an IVA as I am considering this.

Obviously I would need initially to speak to my IP as I would no longer recieve monthly payslips from my employer to send to them and I am guessing my £400pcm payment would need to be maintained over the duration of the IVA (4 more years).

I just wondered how would the monthly income be assessed as a self employed persons income could vary from month to month depending on the amount of business they take. Also if the business was setup under a LTD company structure and the business held funds, would I be obligated to declare it as an asset each year and be forced to withdraw any surplus monies to pay to creditors as a windfall during my annual review.

Obviously I don't want to go down this route if the business will be stripped of all funds and be unable to grow during the IVA period.

[BECKY]

Hi im self employed and it didnt affect my iva at all , i just made sure that all business monies are in the business name. At my annual review i send my accounts rather than pay slips and from that my ip will assess my payments.My end of year profit hasnt been included in my iva so i assume it will come under the same basis as comission or overtime where i will have to pay a % over to my iva, but you'll have to check with ur own ip.

[MelanieGiles]

Hi Cawkers

I am one of the forum experts, and can give you a personal opinion on your situation as presented on the forum. Other experts will also probably advise you, and ultimately your own IP is the main route for definitive advice about your case.

There should be no prolem in becoming self-employed, although you will need to be certain that you can maintain payments at the level you are required to under the terms of your IVA. Your income is likely to be assessed by your IP on the basis of annual trading accounts. If you set up a limited company, and become shareholder of that, then the profits after tax will determine your income - and you may also choose to pay yourself a salary from the company which will also be taken into account.

If you were my client, I would want to see you leaving ample reserves in the company by way of working capital for the following years, but this is something you really need to speak to your own IP anout specifically.

May I wish you well with your proposed venture.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk