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Scottish Trust Deed Forum
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Topic starter
04/09/2012 12:55 pm
I was wondering if someone could answer a couple of questions on trust deeds and being self employed.
I spoke to accountant and they were unsure about what to do with outstanding creditors in my books that will be entered into the trust deed. i.e i claimes for purchases inc vat and i havent yet paid them but will only be paying 19% through trust deed. does that mean the remaining 82% goes back into books and i pay tax on it as profits as i sold the stock already and tax return not sue till next year?
also when takings increase during busy periods of the year can you put the extra money into repairs and building up stock or do you have to pay it to the trust deed as i was told its not what your profit and loss shows as a profit at end of year that goes to your trust deed its what actual cash you have excluding stock and fix fittings your holding?
thanks for any replies 🙂
04/09/2012 1:20 pm
Hi kma77 and welcome.
If you are trading as a sole trader things can be a bit more complex than they would be for employed persons that are in a trust deed. It's going to be tough to give you answers that you can rely on as the only truly relevant answer for you will be whatever you agree with your trustee. Hopefully we can give you some useful information though to help you think things through.
Are you already in a trust deed or is this something you are looking to begin?
I would have thought that contributions would be based upon profit as a sole trader, but let's hear what the representatives of the trust deed firms that post here have to say on the matter...
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
04/09/2012 1:44 pm
Thanks for the reply. Im just in the process of being handed over to an IP through debtline. They seemed to think it couldn't be based on profits as some of its in stock and you don't have the cash to pay out? I have to say its all sooooo confusing 🙁
05/09/2012 9:49 am
Hi kma77
Very generally, anything you owe as at the date you sign the trust deed will be regarded as a debt in the trust deed. They would not and cannot be re added to your books. In effect, you are starting from day one on the day after you sign the trust deed.
The second point is slightly more difficult, your accounts should be a true reflection of your income and expenditure and the figures for repairs etc should be reasonable. The trust deed will be based on your net income from this.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
05/09/2012 11:19 am
Hi
As a sole trader all your debts are included in the trust deed, and that is the end of them . They can. It resurrected at a later stage. As Mark says It is like starting your business from scratch. As far a contributions are concerned, it should be from net profit, so long as you don't deliberately spend money on unnecessary items to reduce your profit. Normal business expenditure has to come into it. Or your business cannot function- that should include any tax and NI due. Make sure you get it all in writing beforehand.
Shona is not currently posting in the Trust-Deed.co.uk forum.
08/09/2012 1:19 pm
Hi
I was self employed and ran a small business but I looked into all the options, for me sequestration was the best bet. I found that the majority of my suppliers would be reluctant to trade after a trust deed, the bank would obviously be impossible etc etc, strangely suppliers seem more willing to deal with me now I have been Sequestrated and I have been asked several times about when I am restarting my business ( I am not) and that they would be interested in supplying,,, strange eh?
08/09/2012 8:57 pm
Hi on track.
I guess some suppliers must be quite open minded. They know there is a commercial risk when they supply on credit to any individual or firm.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
