Starting my own company

[Katrina86]

Hi all, Im hoping to start my own company in Sept. I am doing this to get out of the benefits circle and for a better life financially for me and my 3 children.

I have a business plan done and my income will be going from £2200 pm to hopefully £3500, then tax etc.

How do the IVA treat extra income. Will they increase it but also allow me to have a higher disposable income?

I'm panicking as I have requested and been granted 1year career break. If im honest I foolishly didn't consider my IVA. I have 4 years left at have about £16k outstanding.

My dad doesn't know about the IVA and planning on keeping it that way, as i cant back track now

Also is it possible to open an online business account with an IVA? Anyone use Starling bank?

Any help and advice would be greatly appreciated.

Many thanks in advance.

[Katrina86]

Sorry should have added my IVA payment in currently £215 pm.

[Foggy]

Your IVA payment is likely to increase by 50% of the increase in income. So, using your figures, your new IVA payment would be around £650 more ... so £865 a month.

I imagine that you will not hit a steady increase for a while after starting, so it might be an idea to deal with the increase, with the agreement of your IP, on a month by month basis.

Opening a business account might need some looking around and, maybe, convincing a business manager of your plan. Try to speak to bank managers in person -- as the computer will be biased against you.

[Katrina86]

Many thanks for the reply. God that a lot. I might not be any better off doing this self employed.

That 3500 figure is the income but I have to allow 30% roughly for tax etc. I'll have the debt paid off a lot quicker but will be slog for a year or so to clear it up.

Then I suppose that'll be me free. Does the terms change? I know the iva stops interest etc so I've just checked my account and I owe £14,405. So payments that should be cleared in roughly 16 months?

Am I correct? It's all so confusing.

[Foggy]

You always owe the balance of the full original debt. If you hit that and fees then the IVA would finish early.

Yes, sorry -- the increase would be 50% of the net increase in income, so, after tax, NIC etc.

[Katrina86]

OK yes makes sense. Thank you so much for your reply. I really appreciate it.

[GiovannaCopeland]

This is your money that you will make from the sale of goods, this is what the IVA tax applies to. If you were franchising, you would be paying that money to the company already. You can read about that here at **Live link removed**. Commercial activities are different, too. So read the laws.

[Foggy]

GiovannaCopeland --- An IVA is an Individual Voluntary Arrangement for the purposes of repaying debt. It has nothing to to with VAT or any other retail / business deduction.