Hi
I've approximately £50K debt with credit card companies, my income comes from my own business, however in order to pay my creditors I'm continually having to use my tax money so always behind with my tax payments and basically as with all in this position can only just maintain my minimum payments as long as no bumps in the road. However I'm now also paying 1/1.5K per month to the tax to catch up, in essence I pay out everything I have coming into my business.
Credit card payments each month total approximately £1150.
One of the creditors is also the bank I hold my business acount with, what I wanted to know is can they close my account - I also have a business card with them which I need as I work away alot so use for hotel bookings this is paid monthly from my business account - would this be cancelled if account not closed?
As you are no doubt aware, the money owing to the taxman is strictly not yours to be funding your business working capital with - so it is not suprising that you have run into difficulties in meeting your regular HMRC payments.
I think you would benefit very much from a chat with an insolvency practitioner to simply review your trading cashflow forecasts and see where savings (if any) could be made. HMRC do not like being seen to be an involuntary investor in a business, and it would be wise to set yourself some targets by when you can see your debts coming under control again.
Hi Melanie
Thanks for the reply, however I'd failed to specify the question correctly, if I take up the possibility of an IVA, I assume I can no longer hold/use credit cards in my own name.
My question is, as one of the cards I hold is with the bank my business account is with, does the bank have the right to close/modify my business account and or remove use of my business card?
With the IVA in place and subsequent reduced monthly payments my income can cover all due tax, IVA and other payments.
Regards and thanks again
Phil
If you enter an IVA all debts must be included that are in your name. If your business or personal account is overdrawn you would need to get new banking facilities and this can be difficult especially if you offer a credit/debit card facility.
Should your IVA be accepted all future HMRC liabilities must be paid on time and in full. Any current debts would be included allowing your business to restart and pay the IVA from future profits. In the interim if you have any outstanding HMRC returns you should get them submitted.
Potentially you could do a deal with that creditor to retain your business banking facilities during the IVA, but there would have to be a business case for doing this from which your other creditors would directly benefit - ie ongoing trading to generate profits to pay IVA, and of course the issuing bank would need to agree.
