Hi everyone,
I was declared bankruptcy a few weeks back and was previously a company director. Obviously, I can't be a director for the next year or so but have been struggling finding a 'proper job'.
Am I okay to start a business as a sole trader(self employed). I think I still have an old bank account I can use which I set up earlier this year but never used.
- What would the implications be?
- Who would I need to inform?
- Any income would be varied at first so it would be difficult to specify my monthly income.
- I also work two days a week as an employed delivery driver and will carry that on for the time being.
Any help would be greatly received and if anyone could point me in the right direction on who else to discuss this with it would be great.
Thanks!
Bankruptcy is not a bar to self employment although there are trading rules. You will need to inform the OR and account for any increased earnings. This could lead to an income payments order depending on what you actually earn. The OR will also be able to advise on what trading names you can and cannot use.
You will need to inform HMRC once you begin self employment regardless of what income is generated and you will be allocated whatever references are required for self assessment, VAT and PAYE [if applicable]. If you intend to obtain credit facilities you must also inform any suppliers.
Best of luck in the new venture and do not let the bankruptcy hold you back. I would advise that you retain an accountant to keep everything right and you concentrate on making the business work.
It would be a good idea and many will offer a free interview. An accountant can then estimate your profits for the year and advise on how much to set aside for future HMRC liabilities. They can also advise on PAYE and VAT if necessary.
Thanks again!
I don't really want to get to a point where I become subject to an IPA so wondering whether it's worth it at the moment as I guess I would be working for nothing?
How do I (or how would the OR)calculate my earnings as a sole trader? Is it my gross take home income per month from being a sole trader or is it net monthly income after business costs? Or is it calculated in a different way.
Not sure how the OR would operate. However for IVA purposes I would look for a set of projections and cash flow forecasts and take the income after business expenses and the allowance for tax. I see no reason why the OR would be any different.
You will need the permission of the OR to commence trading, and then need to account for your earned profits. In reality, it is unlikely that the OR would be too interested in a post-bankruptcy trading position to drive IPA or IPO payments, but you cannot rule it out as this is exactly what they are supposed to do!
