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Coline81

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Post by Coline81 » Mon Sep 03, 2018 12:10 pm
Hi…my husband and I are in a joint IVA. He is self-employed, I am not. When we started the IVA process in Sept 2017 we obviously used the 2016/2017 tax return where he earned net profit £12.5k. His profit has roughly been this for the past 6 years or more. We have just completed his tax return for 2017/2018 and he earned £4.5k more in the this tax year due to increased turnover. Obviously this means that our IVA payments will increase once we have our annual review at the end of October but will there be any back payments to pay? We are with PayPlan. Also will the montly IVA payments go up by 50% of the ‘pay rise’ so roughly £180 a month? We have also been told that because his tax is over £1,000 we now have to pay in advance and have to pay nearly £3k by the end of Jan 2019. Would Payplan see this as a justifiable reason to get a payment break or does anyone know if HMRC will let us set up a monthly direct debit rather than making us pay 50% by end of Jan 2019 and 50% but July 2019.

Foggy

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Post by Foggy » Mon Sep 03, 2018 12:17 pm
Coline81 wrote:
Hi…my husband and I are in a joint IVA. He is self-employed, I am not. When we started the IVA process in Sept 2017 we obviously used the 2016/2017 tax return where he earned net profit £12.5k. His profit has roughly been this for the past 6 years or more. We have just completed his tax return for 2017/2018 and he earned £4.5k more in the this tax year due to increased turnover. Obviously this means that our IVA payments will increase once we have our annual review at the end of October but will there be any back payments to pay? We are with PayPlan. Also will the montly IVA payments go up by 50% of the ‘pay rise’ so roughly £180 a month? We have also been told that because his tax is over £1,000 we now have to pay in advance and have to pay nearly £3k by the end of Jan 2019. Would Payplan see this as a justifiable reason to get a payment break or does anyone know if HMRC will let us set up a monthly direct debit rather than making us pay 50% by end of Jan 2019 and 50% but July 2019.

I am afraid that I cannot comment on how Payplan will handle this as they are one firm that tends to march to it's own drum and do things their own way. Best to speak to your case handler there. Most firms deal with the self employed on a month to month or quarterley basis, so that things get averaged out. My old IP used to treat my self employed (part-time) earnings each month, taking any extra as we went along, again monthly.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

kallis3

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Post by kallis3 » Mon Sep 03, 2018 1:13 pm
Agree with Foggy - you need to speak to Payplan and get a proper reply- in writing!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

Coline81

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Post by Coline81 » Mon Sep 03, 2018 1:20 pm
I have been sending my payslips to them quarterly but they have never asked for anything from my husband. I know that when we started the process they asked if last years earnings were pretty standard and i said yes - which they were and have proof of this. I'm really panicking that they will make us back pay and also up the payments.

kallis3

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Post by kallis3 » Mon Sep 03, 2018 1:24 pm
You won't actually be in a joint IVA - it is an interlocking one. Your husband needs to speak to Payplan - your payments won't increase but his might.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

peersie

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Post by peersie » Mon Sep 03, 2018 3:37 pm
hi on the hmrc front if this is first time,they will do a payment plan i had to pay
£2400 [same thing tax up front for next year]i had to pay £400 a month for 6 months
[ie before july]luckily id payed my final payment for my iva in december
peersie

UpToMyNeckInIt

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Post by UpToMyNeckInIt » Mon Sep 03, 2018 4:53 pm
Hi, I was self-employed throughout my IVA as well.

Firstly, be thankful that an increase in turnover/profit is actually a nice problem to have!!! Your IVA provider should also appreciate that such figures will fluctuate year to year, (I too always used my latest tax returns at annual review time).

Personally, I worked with my accountant to ensure that with increased turnover came increased expenditure, (all within legal/HMRC guidelines of course) to off-set any net income increase, thus keeping my IVA payments the same.

Therefore, if you have not yet submitted your tax return, it might be worth having a chat with your accountant if you have one.

Additionally, you might be able to increase your IVA allowances, assuming of course that you are not already at the top end of the allowances range.
My opinions are just that: Based on my experience and being a self-employed IVA customer.

Coline81

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Post by Coline81 » Mon Sep 03, 2018 5:24 pm
I don’t think the accountant was expecting it to go up that much and neither were we. I’ve re-read his t&c’s and can’t see anything about a back payment so at least that something. I guess they will treat as if I got a pay rise at the review and just increase the IVA payments by 50%. I’m going to try and pay off as much of the extra HMRC payments by the end of Jan and then ask for a 6 month payment plan to have it all paid off by the 31st July. It’s just crazy as he’s not guaranteed to earn that again this year and it’ll just be even more stress if he doesn’t. Thanks for the replies guys!xx

Foggy

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Post by Foggy » Mon Sep 03, 2018 5:38 pm
Coline81 wrote:
I don’t think the accountant was expecting it to go up that much and neither were we. I’ve re-read his t&c’s and can’t see anything about a back payment so at least that something. I guess they will treat as if I got a pay rise at the review and just increase the IVA payments by 50%. I’m going to try and pay off as much of the extra HMRC payments by the end of Jan and then ask for a 6 month payment plan to have it all paid off by the 31st July. It’s just crazy as he’s not guaranteed to earn that again this year and it’ll just be even more stress if he doesn’t. Thanks for the replies guys!xx
This is exactly why my former IP dealt with it each month and treated it as extra income. There are two options here, and both have drawbacks: 1) treat it as extra income -- in which case it will need to be back paid, or 2) treat it as a pay rise and you might not have the income to pay it going forward.

I don't want to teach you to suck eggs, but I used to split my self emplyment income three ways: a third was mine, a third was my creditors and I kept a third back for the upcoming tax bill (being PAYE also, I knew that all of my SE income was going to be taxed).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

SteveUK

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Post by SteveUK » Wed Sep 05, 2018 10:15 am
Don't payplan ask your husband for a cashflow forecast for the coming 12 months at annual review time? They always did with me. I used the previous years accounts as the basis for this.
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