Sole Trader Debts | Self Employed Debt | Help and Advice
McCambridge Duffy provides a range of solutions for Sole Traders with debt problems. This page gives some information on sole traders and help with their debts that McCambridge Duffy can offer them.
What is a Sole Trader?
A Sole Trader is the term used to describe a business owned and controlled by one self employed individual irrespective of whether there are any employees are not. As a sole trader you are personally responsible for all business debts which as a sole trader are treated the same as personal debts, so therefore if your business fails or gets into financial difficulty you personally will be pursued for the debts and you could stand to loose everything including your personal assets.
Difference between a sole trader and regular business?
It is relatively easy to set up as a sole trader, and the costs of running the business are much lower than more complicated businesses such as partnerships or limited companies. The main disadvantage to being a sole trader is the fact that there is no distinction between the business debts and personal debts, so the sole trader is personally liable for all debt and your creditors will pursue you personally for full repayment.
What help is available if your a Sole Trader with debts?
When a sole trader gets into financial difficulty there a number of debt solutions available to them, such as debt management, an IVA or bankruptcy. The IVA legislation was launched in 1986 primarily aimed at the self employed individuals and was designed to allow viable businesses to continue to trade while returning monies to creditors. The IVA covers all unsecured debts such as trade creditors, overdrafts and any HMRC liabilities in addition to any personal liabilities such as loans or credit cards. Not only do the trade creditors and HMRC see a return on their outstanding debts, there is also the possibility of recovering even more as a result of ongoing trading.
How do Her Majesty's Revenue & Customs view IVAs?
HMRC are also very supportive of IVAs, they do however insist that all outstanding returns due for VAT, PAYE and self assessment are submitted before they will agree to the IVA. Ultimately, HMRC accept that individuals and businesses can get into financial trouble but there is no excuse for non submission of statutory returns.
Are you a Sole Trader who needs Debt Help?
If you are a sole trader and you business has got into financial trouble it is vital that you seek help from an insolvency practitioner [IP] as soon as possible. McCambridge Duffy has 6 in house IP’s that offer a free no obligation consultation to help put you and your business back on a sound financial footing while protecting your personal assets such as your home.
