Self-Employed IVA FAQs

What is a Self-Employed IVA?

A Self-Employed IVA is a formal debt solution designed to help you repay your unsecured debts over an agreed period while allowing you to keep running your business.

Do I qualify for a Self-Employed IVA?

If you’re Self-Employed, live in England, Wales or Northern Ireland, owe £7,000 or more in unsecured debts and can afford to pay £50 each month, you can apply for a Self-Employed IVA.

If you live in Scotland, you might qualify for a Trust Deed which is a similar solution – you can check the differences here.

What debts can I include in a Self-Employed IVA?

Most unsecured debts can be included, such as:

• Bank overdrafts, loans and credit cards
• Store cards and catalogue debts
• Council tax arrears
• Payday loans
• County Court Judgments (CCJs)
• Utility bill arrears, including gas, electricity and/or water
• Loans from family or friends
• HMRC debts (including benefit overpayments)

Debts usually not included are:

• Mortgages and secured loans
• Hire purchase (HP) agreements
• Court fines (like speeding tickets)
• Student loans
• Child support arrears
• Any debts incurred after your IVA starts

What’s the difference between a Self-Employed IVA and a regular IVA?

• A Self-Employed IVA can adjust monthly payments to match your business’s cashflow, especially if your income changes seasonally.
• You can prioritise payments to certain creditors (like key suppliers) to keep your business running, which isn’t usually possible in a standard IVA.
• You’ll create a 12-month business budget to show creditors your arrangement is sustainable – this isn’t required for a regular IVA.
• You’re more likely to be allowed further credit over £500 in a Self-Employed IVA if it’s essential for your business, provided you can afford it.

Can I keep trading while in a Self-Employed IVA?

Yes. One of the main benefits if that you keep full control of your business and can continue trading while repaying your debts affordably.

Will I lose my home or car?

Unlike bankruptcy, you won’t normally be forced to sell your home. Under the 2025 IVA Protocol, you’ll not lose your home as a result of the IVA, if you have a level of equity of £10,000 or more you’ll need to make an additional 12 payments into your IVA, extending it to six years. You may be asked to sell a high-value car, but you can keep a vehicle essential for work or daily life, typically under £8,000 in value.

How long does a Self-Employed IVA last?

Self-Employed IVAs usually last for five years, but it can extend to six years if you own a home with equity above the threshold or if reduced payments are necessary due to changes in your business.

What if I owe money to my suppliers?

A Self-Employed IVA has a degree of flexibility so you can prioritise payments to suppliers who you need to keep trading with.

How are payments calculated?

You’ll create:

• A business budget projecting income and expenses for 12 months, including tax and National Insurance provisions.
• A personal budget covering household costs like rent/mortgage, bills and essentials. The money left over after expenses is what you can afford to pay your IVA each month.

What fees are involved?

Our sister company, PayPlan Bespoke  Limited, manage the IVA arrangements. Their fees are included in your monthly payment and are only deducted once your IVA is approved by creditors. If your proposal is rejected, you won’t be charged for the work done so far.

The fees for an IVA are split into two types – a Nominee’s fee of £2,300 and a Supervisor’s fee of up to £40 per month, based on the level of your payments. If any additional sums are paid in during the term of the IVA a further fee of 20% of the funds received may be applied.

Can I keep my business bank account?

You can usually keep your business bank account. However, if it’s significantly overdrawn or linked to other debts with the same bank, you may be advised to open a new account to protect your money.

Do I have to keep paying tax, National Insurance and VAT?

Yes – you must keep paying these as usual during your IVA. Any arrears up to the start of your IVA can be included in the arrangement.

How does the IVA affect my credit rating?

Your IVA will stay on your credit file for six years, affecting your ability to borrow. After completion, it will be marked as complete on your file.

What is the Insolvency Register?

Your name will be listed on this public register during your IVA, but it’s primarily accessed by creditors and lenders.

What if I can’t afford payments?

Payments can be adjusted monthly based on your business cashflow. If you struggle, contact your Supervisor as soon as possible as they may be able to arrange a payment break or reduction.

What if I lease my business premises?

You may still be able to trade from leased premises if you enter a Self-Employed IVA.

However, there are a couple of things you’ll need to do:

• Read the lease agreement carefully. In some cases, the lease may state that it’ll be terminated if you enter an IVA or bankruptcy. If your lease does state this, discuss your financial situation with the landlord of the property – and ask whether they’ll actually use their right to terminate the lease if you enter a Self-Employed IVA. If they agree not to terminate the lease, it’s important to get confirmation of this in writing.
• Check that you aren’t in arrears with payments under the lease agreement, as this could result in the landlord not allowing you to keep the property.

There will be an allowance in your cashflow to make your lease payments when they fall due – plus repayment of any arrears – so the landlord can see that you intend to keep up with your payments.

Even if the above termination clause is in your lease agreement, the fact that you’re taking action to deal with your debts may convince the landlord to ignore this and allow you to continue trading from the premises.

How would a tax rebate be treated in a Self-Employed IVA?

If you’re due a tax rebate for either a tax year prior to the approval of your Self-Employed IVA, or for the tax year in which your Self-Employed IVA was approved, HMRC will – in many cases – either send the rebate directly to your Supervisor or offset it against the outstanding balance on your HMRC account.