I am very likely to close an IVA through StepChange next week. At the moment a work through an agency. I want to get back into better paid contracting work and set-up a new ltd company. The ltd company will invoice a customer and will pay me a salary and dividends on top, but part of the money will stay and build-up in the ltd company to be paid in dividends at a later moment and possibly until there is enough money to pay a lump sum to pay off the IVA amount agreed (which is about 20-25% of the total debt owed). Is operating this way allowed?
No. The company would be allowed to retain only sufficient working capital for efficient operation, but not to build up any reserves. You will be expected to draw a fair salary and the also declare and draw the full dividend (apart from agree working capital) which will be considered and treated as your income.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
