Self employed question

[Clairbare]

Right say by some very slim chance our IVA is agreed (this may have to be based on projected income) but then my self employed income decreases. Not much (not enough to effect the agreed IVA payment) is it likely to void the IVA??

[Michael Peoples]

Your IP will draft a set of projections as part of the IVA documents. These should be prudent and based on current trading conditions and work in progress. There is no point in projecting ridiculous figures just to show a good surplus when the IVA could be doomed to fail.

Your IP should also make allowance for the liability for tax and national insurance as this will have to be paid. If the projections are wrong or the allowances have not been made your IVA could fail when the next tax debt falls due.

The IP will receive a copy of the accounts and if your projected income drops but your IVA payments are not affected because for example you receive higher tax credits or your partner's income has increased, there is nothing to worry about.

Everything will be explained by your IP at the initial meeting and as you are self employed there will have to be a face to face meeting where any problems or queries can be raised and addressed. Good luck.

[MelanieGiles]

Trading projections are generally based on historic past performance and current trends, and like Michael I would err on the conservative building some sensitivity (what if!) assumptions into your plans. You can always pay more if things eventually improve.