If you are self-employed or an owner of a small business, Business Debtline offers expert guidance to help manage debts and take control of finances. They have advisors available over phone or webchat who are on hand 24/7.
Debt can be an enormous strain for self-employed workers and small businesses, evidenced by an increase in calls to Business Debtline.
Budgets can help you keep track of income and expenses, especially if your income fluctuates regularly or you’re in debt. They allow you to ensure every penny counts towards saving for an upcoming vacation or paying down debts.
Your budget should be reviewed every six months to provide an accurate picture of your finances, however it’s advisable to do it sooner if either your income or circumstances change significantly.
Outline all sources of income, including full-time jobs, side hustles, government support or any other forms of financial aid you might receive. Also list household expenses, such as rent or council tax bills, utility bills or groceries.
Sort your debts into priority and non-priority categories before calculating how much is left over for living costs – this number may be positive or negative depending on what can afford to go towards paying off debts.
Partnerships are an increasingly popular form of small business organization and they can bring many advantages, not least of all increasing your available funds for operating the business smoothly.
Partners bring different skills to the table; an accounting expert, for example, could help your company manage your accounts more efficiently.
An additional advantage of entering into a business partnership is additional capital; this can be especially helpful when expanding and meeting expanding demands. Furthermore, having access to contacts across industries or companies could open up additional opportunities not otherwise available to your company.
To form a business partnership, first decide whether it will be structured as either a general partnership or limited liability partnership (LLP). Next, register it at your local tax office and create a business partnership agreement laying out each partner’s rights and responsibilities.
HMRC usually attempts to reach out when you owe money and try and work out an affordable repayment plan with you – whether that means phone calls, letters or SMS messages.
However, if this doesn’t work and payments become arrears, HMRC may use enforcement powers to recover your debt – whether by taking money directly out of your bank account or selling items in order to repay what has been owed.
These measures should only ever be employed as a last resort and should be avoided by those owing regular payments, since they can be highly stressful and unnerving experiences.
HMRC may send reminder letters advising of an overdue tax account before issuing a final opportunity letter, giving you one last chance to settle before legal action is taken against you.
Legal action refers to any formal proceeding filed before a court, tribunal or other legal body in order to seek some form of legal relief from someone or something. While it can involve filing suit against someone, more often it involves filing claims for money damages or defending criminal cases.
Dependent upon the legal status of your business, you could potentially be held personally liable for debts accrued by it as well as liabilities accrued within it – this can be confusing!
Business Debtline, a national charity, provides free, impartial and confidential advice over the telephone or via their website and webchat. In addition, they have fact sheets, guides and sample letters available that may help determine which solutions best suit your circumstances.
As soon as your business or personal finances are in disarray, acting promptly and openly is of utmost importance. A quick and decisive response can keep debt under control while avoiding surprises from HMRC and potential legal action due to unpaid bills or other misdemeanors.