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[seqhelp]

I have a total debt of just over £105,000. Part of this is due to a bank loan (£15,000) and the other (£90,000) in VAT. Unfortunately, due to poor accoounting advice, I am left completely up the proverbial. I have a CFPOM from HMRC issued today. I was expecting this and so am not surprised or upset. I am actually so glad to finally have an end in sight.

I had a visit from a 'VAT man' a few months back and we discussed the best way to deal with this. I am not, by nature, a quitter and would rather pay my debt. Of course I got a bit upset when I was talking with him and I think he knew I wasn't trying to be dodgy about anything. He said that even though they would consider dropping the debt I may be throwing good money after bad if I chose to try to repay it. He also said I may be locked in for years if I'm trying to pay it and that in my circumstances it may be more beneficial for me to go through sequestration as it will all be over and done with.

Having looked at my limited options sequestration is definitely the way forward. With that in mind I have a few questions regarding my employment siuation. But first a bit of background info on my situation:

I am self employed. I take cash and card payments. I have an amount of stock and tools which are my tools of trade (I'm not a retail shop). My business is service based and the only way I can earn money is to continue providing services. I have been below the VAT threshold for the past 2 years.

I own no great assets. I have a car which is worth around £500 and another about the same value if not less (My husbands). I am aware that in Scotland they cannot take anything from my home as I don't have anything of great value. I am married but my husband doesn't earn much as he is at University and works part time only so I am the sole money-maker. I have a daughter who lives away at university but also uses this address.

Questions:
Will they look into/Will it affect my husband and daughters financial affairs (nothing to see)?

Will they allow me to work for myself as a sole trader?

Could my husband or daughter set up a business and employ me as a service provider and pay me a wage?

Thank you in advance

[Hayden]

Hi seqhelp

I have to say that I am not sure what a HMRC CFPOM is but I assume it is some kind of final payment demand?

If you are thinking about bankruptcy (sequestration in Scotland) then the first thing to say is that there is nothing to stop you continuing to work as a sole trader. However there are a couple of things to be mindful of. The first is that you can only trade as yourself. ie you have to use your name (the name you go bankrupt in) rather than a trading name. I think you can still use a trading name but you must always give your full name TA eg Jane Smith Trading As XYZ....

The other issue is your bank account. If you have a business account this may be closed by the bank (as well as any personal account). You should speak to the bank before hand and find out. If it is going to be closed then opening another business account will not be easy. I would then suggest you open a basic personal account and use that for the business.

Regarding your assets you did not mention whether or not you are a home owner. If not then there should be no issue. However if you are then you need to be aware how the property will be affected. Please let us know and we can certainly help advise you in this area.

In terms of your husband you will have to declare his income. He will not have to contribute to any debt in your name. However he will have to contribute to his fair share of the household expenses. Are you supporting your daughter financially while she is at uni? If so this will also require some additional thought.

Your husband or daughter could set up a business and employ you. However I cannot see the point of this given you are allowed to continue acting as a sole trader.

Hope this helps . Please let us know if you have more questions.