If you own or manage a small business with debts, or need support in restructuring them, it is crucial that you seek assistance. There are many free organizations which offer advice and assistance; just make sure the terms and conditions on their websites match up.
Money Advice Trust’s Business Debtline service offers free, independent and confidential debt advice over phone and webchat. Their expert advisers offer assistance whenever necessary.
Sole trader
Sole traders are an advantageous form of business ownership; they manage their company without employing others and thus enjoy more financial control and flexibility in running it.
So if you’re a sole trader struggling with debts, help is available through Business Debtline – free, independent and impartial advice available from them to assist in clearing away business debts.
They can also assist with managing both personal and business finances, including making sure you pay the correct tax and national insurance contributions.
As a sole trader, it’s vitally important that you stay up-to-date with your taxes and pay them on time as this could result in fines, penalties or even imprisonment if not done so.
Limited company
Limited companies are independent legal entities that own assets, make contracts, sue in their own name and can secure business loans.
As opposed to sole traders, limited companies are legally distinct from their directors and shareholders; any earnings accruing from sales belong to the business itself rather than its members.
Once your annual taxable income exceeds PS30,000, LLCs can also be tax-efficient structures as you pay Corporation Tax on profits rather than personal taxes or National Insurance contributions (NIC).
Assuming ownership of a limited company can help create an image of professionalism. Furthermore, it will strengthen credibility and draw customers. Furthermore, being part of one can protect personal finances in case of insolvency.
HMRC
HMRC is an arm of the UK Government responsible for collecting taxes, providing state support, and administering minimum wages.
It also details national insurance contributions.
Additionally, it oversees the taxation system and ensures funds are transferred from tax payers into Treasury for public services.
As soon as you owe income tax, it’s essential that you contact HMRC immediately in order to arrange payment by instalments and manage your debt effectively in order to prevent more serious complications down the line.
HMRC can be reached via telephone and webchat and offers free assistance with business debt issues.
Time to Pay from HMRC offers an expedient solution for dealing with tax arrears quickly and affordably. They’ll inform you how much is owed and the monthly payments you can afford.
Business budget
As a small business owner, budgets are an invaluable tool in making sure that your enterprise thrives and thrives. Budgets help set short and long-term goals, pinpoint areas where costs could be reduced or revenue increased and track progress toward those goals.
When creating a budget for your business, it’s essential to identify both fixed expenses and variable costs. Fixed expenses could include rent, utilities and employee salaries while variable costs include equipment purchases, advertising expenses or taxes that change month to month.
An effective business budget should be dynamic enough to adapt with changes in finances, setting aside funds for unexpected expenses or growth opportunities.
