Self Employed IVA Help & Advice
Being self-employed can make dealing with debt feel a little more complicated. Your income might change from month to month; you have business costs to cover, and tax bills can sometimes arrive when you least expect them. But being self-employed doesn’t stop you from getting an IVA.
At PennyPlan, we’ll take the time to understand your situation and explain your options, without making you feel judged or pressured.
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How Does An IVA Work When You're Self Employed?
Being self-employed means your finances don’t always look the same from one month to the next. You might have a busy period followed by a quieter one, while business expenses and household bills still need to be paid.
An IVA takes these circumstances into account.
Instead of just looking at your income for one month, your finances can be assessed to understand what you typically earn, what it costs to run your business and what you need to spend on your household.
Your proposed IVA payment is then based on what you can realistically afford.
If you’re still trading, the IVA can be structured to support that. The aim is to deal with your debts while giving you the space to keep working.
At PennyPlan, our advisors support self-employed clients every day. We’ll explain how an IVA could work in your situation, talk through the alternatives, and help you decide on a way forward.
Can you get an IVA if you’re self-employed?
Yes, being self-employed doesn’t automatically prevent you from getting an IVA.
You could be a sole trader, company director or run another type of business and still potentially qualify. The important thing is whether an IVA is right for your circumstances and whether you can afford the proposed payments.
Your income doesn’t have to be exactly the same every month. If your earnings fluctuate because of seasonal work, changing contracts, or the nature of your business, this can be taken into account.
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Is a Self Employed IVA Right for You?
A self employed IVA can be a helpful option in some situations, but it won’t suit everyone. It depends on things like how stable your income is, the level of your debts, and whether your work is likely to continue.
Some people use an IVA to bring multiple debts together while continuing to trade. Others may find a different type of debt solution is more appropriate, particularly if their income is uncertain or debts are lower.
We’ll listen to your situation and talk through what options are available, helping you find an approach that feels manageable and realistic for you.
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We Help You Understand Your Self Employed IVA Options
Understanding how to deal with debt is an important step towards getting things back on track. We will explain your options, so you can focus on easing the pressure caused by arrears and find a clear, manageable way forward.
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What Debts Can a Self Employed IVA Help With?
An IVA can potentially help with a range of personal and business-related debts, depending on who is legally responsible for them.
This can include credit cards, personal loans, overdrafts, store cards and catalogues, certain HMRC debts, self-assessment tax arrears, VAT arrears, supplier and trade debts, business borrowing you’re responsible for, and personal guarantees.
What about business debts?
This depends on your business structure. If you’re a sole trader, you’re generally personally responsible for your business debts. This means qualifying business debts can potentially be considered alongside your personal debts.
If you’re a limited company director, the company is normally a separate legal entity, so an IVA doesn’t deal with debts that belong to the company.
However, you may have personally guaranteed business borrowing. If the company can’t repay that debt, you could become personally responsible for it, meaning it may potentially be considered as part of your IVA.
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Can I Keep Running My Business With An IVA?
If you’re self-employed, one of your biggest concerns might be what happens to your business if you enter an IVA. After all, if your business is your main source of income, you need to know you’ll still be able to work and earn a living.
In many cases, you can continue running your business during an IVA. An IVA doesn’t automatically mean you have to close your business or stop trading.
Your business will form part of the overall financial assessment. This means looking at how much you earn, what it costs to keep the business running and how much you need to cover your household expenses. This is particularly important if your income changes from month to month.
If you’re a sole trader, you’ll generally be personally responsible for your business debts, so these may be considered alongside your personal debts when working out whether an IVA is suitable.
If you’re a director of a limited company, the company is legally separate from you. Its debts won’t automatically become your personal debts, although you may be personally responsible for borrowing you’ve guaranteed.
What happens to my business assets?
Your business assets can also be taken into account when your IVA is assessed. This could include equipment, tools, vehicles or other items you rely on to earn your income.
That doesn’t mean you’ll automatically lose the things you need to keep working. The value of an asset, what it’s used for and your individual circumstances will all be considered.
Can I borrow money for my business during an IVA?
There are restrictions on taking out further credit while you’re in an IVA, so this is something worth thinking about if your business relies on borrowing.
If you need to take out credit during your IVA, you may need approval from your Insolvency Practitioner depending on the amount and circumstances.
Your business income can also change during the IVA. If you’re having a particularly difficult period and your income falls, or your circumstances change significantly, it’s important to let your Insolvency Practitioner know rather than simply stopping your payments.
Is A Self Employed IVA Right For Me?
An IVA could be suitable if you’re struggling with multiple debts, can’t afford your current repayments and have a sustainable income from your business.
But being self-employed doesn’t automatically mean an IVA is the right solution.
Your income, business costs, debts, assets and personal circumstances all need to be considered. Another debt solution could potentially give you a better outcome.
That’s why we’ll look at your situation before you make a decision.
Our advisors will take the time to understand how you earn, what debts you’re dealing with, and what support could make sense for you. We’ll explain your options clearly, answer your questions, and help you decide on a way forward that feels manageable.
We’re here to help you explore your next steps – talk to us today.
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Self Employed IVA FAQ's
What happens if my income changes during an IVA?
If your income goes up or down, this can usually be reviewed as part of your IVA. Self employed income is assessed differently to a fixed salary, and changes are taken into account during reviews.
The aim is to keep payments fair and manageable, rather than locking you into figures that no longer reflect your situation.
Can personal guarantee debt be included in a self employed IVA?
Personal guarantee debt can often be included, as it’s usually your personal responsibility rather than the company’s.
An advisor will look at how the guarantee works and whether the debt qualifies. We’ll explain what this means for your situation and how it fits into the wider plan.
What if an IVA isn’t right for me?
Can I get an IVA if I’m self employed?
Yes, it’s possible to get an IVA if you’re self employed. IVAs are available to sole traders and limited company directors, as long as you have qualifying unsecured debts and enough income to make regular payments.
Your income doesn’t need to be the same every month, but it does need to be sustainable. An advisor will look at your situation in detail before recommending whether an IVA is suitable.
Does a self employed IVA include HMRC tax debt?
In many instances, yes. HMRC debts such as self assessment arrears and VAT can often be included in a self employed IVA. Whether they can be included depends on your circumstances and how the debt has built up.
Can I get an IVA if my income changes every month?
Yes, potentially. Variable income doesn’t automatically prevent you from getting an IVA. Your income can be assessed over time to understand what you can realistically afford.
Can I get an IVA as a sole trader?
Yes. Sole traders can potentially enter an IVA. As you’re generally personally responsible for your business debts, your business and personal finances will both be relevant.
Can HMRC debt be included in an IVA?
Certain HMRC debts, including some Self Assessment and VAT arrears, can potentially be included.
What happens if my business income falls?
Speak to your Insolvency Practitioner as soon as possible. They can review your circumstances and explain what options may be available.
What happens to my business bank account?
This will depend on your banking arrangements and the debts connected to the account. It’s something that should be discussed as part of your assessment.