I W Jamieson - I W Jamieson & Co
Taking care of business
Sole Traders


It has never been easy to be a Sole Trader. Long working hours and not normally well paid. The rewards are often gauged by the opportunity to work for and , be answerable to no other but oneself. You can’t be sacked !

Being a Sole Trader can be rewarding when things run smoothly. It is often said that you should not employ relatives , businesses are often made up of relatives bringing different skills to the table.

From a business point of view Sole Traders and the Self Employed are in a vulnerable position with regard to their creditors. Not being a Limited Company exposes them to debts that have unlimited liabilities. Personal assets are at risk when things go wrong.

The recent dramatic downturn in the building and construction industry has seen many builders and allied trades lose valuable contracts. Banks are reluctant to expose themselves to further lending risks. Overdrafts are being called in. Years spent building up a reputation is also at risk.

When income is reduced borrowings can’t be serviced , debts mount up. With no obvious answer in sight , you start to lose confidence and face the very real possibility that your future is in doubt. Self  Employed people rely on the advice of professionals. Solicitors for legal guidance , Accountants for tax obligations and preparing annual accounts. They don’t normally require the services of a professional Insolvency Consultant.


It is true that Liabilities are unlimited and personal assets are set against them. However , The 1986 Insolvency Act recognizes that a Sole Trader is seen as an individual in his or her own right. Thus ,can take advantage of the new legislation changes made possible by the 2002 Enterprise Act and introduced on the 1st April 2004.

An Individual Voluntary Arrangement is a very viable proposition for both the Creditor and Debtor. The object is to reach a solution that benefits both parties by continuing to trade through the problem. Once an agreement has been reached and confirmed at a Creditors Meeting , the County Court chosen for the application endorse the agreement to ensure security for all. This process is dealt with by one
of our professional Insolvency Practitioners.

Affordable monthly payments are made to the Insolvency Practitioner who is now referred to as the Supervisor. If it is not possible to pay the full amount of your liabilities , it is required that payments are made for 5 years. All debts within the arrangement that remain unpaid at the end of the 5 years are written off.

This agreement is normally accepted by Creditors if a superior return is greater than would be available in a Bankruptcy. Creditors are supplied with a “ Statement of Affairs ” which inform them of all your “ Assets & Liabilities ” and “ Income & Expenditure ”. Creditors then consider whether to vote for or against the proposal. This by proxy or at the Creditors Meeting. It is carried once a majority of 75% in
cash value has accepted.

The arrangement is an ideal opportunity for the Trader to be given the time to turn things around. Personal assets are invariably rescued.

Qualifying conditions have to be met and in the main are straightforward . Naturally individual circumstances are different and the outcome of the options available have to be considered by the Sole Trader involved.

The main thing when experiencing a difficult financial period is not to panic. Explore your options. Be prepared to accept that you are good at what you do , let other professionals that are good at what they do , provide the advice and guidance that may possibly show you a way forward.    

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