How will this work for a limited company ?

[matt1971]

Hi,

I am approaching my 1st year anniversary of my IVA (Started middle Feb 2007)
My question is I have a limited company whose end of year accounts (to June 2007) need to sent to my IP, but only the period March - June 2007 of my annual accounts are during the IVA.

I have dividend conditions on my IVA which state over a certain amount then 50% has to be paid to my IP - How will this work for the 1st year when only a couple of months are included? The time prior to the IVA starting my company accounts and profits were being used to pay off creditors and HMRC.

Thanks in advance

[MelanieGiles]

Hi matt and welcome to the forum

The IP will apply a pro-rata calculation over the company profits, unless you are able to provide accurate figures for the period March to June 2007.

If dividend payments were made to you during that period, which are in excess of the amounts you stated within the IVA proposal, you will need to pay over 50% of the uplift to your IP.

I would suggest trying to do a three monthly summary of profit if you can, but maybe your IP will take a pragamatic view and ignore the first three months, thus concentrating entirely upon the accounts for year ending June 2008, which all fall into the IVA period.

This is only an issue for you if you have been drawing dividends in excess of the amounts stated in your IVA proposal.