Best wishes Muppet, it is obviously a hard thing to go through, but sometimes, you need the hard stuff to appreciate the good stuff! Also, the fact that you have already made a list of things that you would do differently next time speaks volumes about you as a person. You are going to be fine and will bounce back right as rain.

Sometimes the painful lessons are the hardest earned, but pay the biggest benefits later on down the road.

I am one of those 9-5'ers earning a paycheck on a regular basis, and while there is a lot to be said for a steady income, I'd love to be able to tell off the boss once in a while and give it a go on my own full time! Probably not going to happen any time soon!

Once again, best of luck, and I hope you recover your gear.

--------------------
James
"Never interrupt your enemy when he is making a mistake" ~Napoleon Bonaparte~

Nice one Muppet, you've done that now... time to brush down, re-group, take stock and build another raft... Go for it brother!!!

Hi
If you start up on your own from scratch then forming a Ltd Company won't help in the slightest - the bank will only lend to the business if the directors personally guarantee the loan, certainly a large percentage if not the whole.

If you start a Ltd Company, and pay yourself a salary the company is liable for the PAYE tax payments immediately. If the Ltd doesn't make the payments, then the tax man later comes to you personally for the income tax due.

As a sole trader you can balance your Business Expenses against the income you personally take from the business.
As a Ltd Company all your personal income (as a salary) is liable for tax, whatever the cashflow/expenses state of the company.

So in my experience (been there ) the moment a small Ltd Company ceases to have a good healthy cashflow, CLOSE IT DOWN, as you can NEVER get any salary out of it without full personal income tax liability - which you will have to pay.
And any Personal Guarantees the bank insisted on will end up with a Bankruptcy petition...

Whereas as a sole trader any business expenses can be offset against income (from any other sources as well), and you won't end up owing the Inland Revenue huge sums of money.

There is no requirement for a Sole Trader to make any profit whatsoever.
But a Limited Company will owe tax on all its director's salary payments even if it has no income.

In fact if the directors of a Ltd Company borrow money to keep the show on the road and pay themselves something to live on, they end up owing tax on the part of the loan they've used to pay themselves (as well as repaying the loan + interest...)

None of that nonsense for a sole trader.
Disclaimer: I know nothing about this...

Hey gang!

Thanks for all the words of support, they do help, honest!

I'll keep you posted as to how I get on, I've got a few ideas up my sleeve as to how I get my gear back!

For the time being, I'm gonna keep on working at getting things back on track, I'm actually quite looking forward to getting this resolved so that I can sleep at night again and start enjoying music for the first time in ages!

Tony, if I ever end up like you, the world will be a better place for having 2 of us!!!

Catch you all in a bit!!

Mupp!

P.s. it's almost a whole week we've gone without the OT forum, how weird is that!!!!

--------------------
The early bird may catch the worm, but it's the second mouse that gets the cheese!

as the butt hole surfers say"its better to regret something you did than something you didnt do"

wise words.hope it all goes well for ya .
i feel for ya dude
good luck

--------------------
www.myspace.com/onemanandalaptop

Edited by paul tha other (12/10/07 02:56 PM)

Quote paul tha other:

---

as the butt hole surfers say"its better to regret something you did than something you didnt do"

---

Unless that "thing" is sheep-shagging.

Ah the joys of Hexham!

Baaaaaaaaaaaaaaah!



--------------------
The early bird may catch the worm, but it's the second mouse that gets the cheese!

As one who's been through the mill myself, my thoughts are with you. I'd raise the 'graemlin' glass but I just can't find it (damned missing o.t.)

So here's my virtual Jack (the best hard drink, imho)shot: L'chaim, glug.

Best of luck, muppet. You'll bounce back stronger.

--------------------
Gear list: If you can't find it, grind it

Quote MadManDan:

---

Best of luck, muppet. You'll bounce back stronger.

---

I'm sure if Alan Partridge has... is... was... bounced back, you will too

Cheers,
Peter

--------------------
Composer, Producer, Sound Designer
www.universal-sound-design.com

Cheers Dan,

I'll be having fun tonight with all these drinks!!

Ben

--------------------
The early bird may catch the worm, but it's the second mouse that gets the cheese!

The pros and cons between limited liability and sole trader businesses are complex and whether one is better than the other depends enormously on what you are doing, how many people are invovled, whether you need to borrow money and what the risks are likely to be, amongst many other things.

It is not a decision to take lightly and you need to find yourself a good accountant and talk it through before deciding. Running a Ltd business is more expensive than sole trader, but not much if you have a good accountant and are prepared to do some of the work yourself. And if you juggle the salaries/dividends right you don't have to worry about PAYE either. You'll still have to pay tax, but it's not as onorous as suggested.

I spent many years as a sole trader but converted to working through my own limited liability company about five years ago. I now pay far less personal tax than I used to.... but enjoy a more comfortable lifstyle -- and I have comfort of knowing that should things go belly up, I only risk the company held assets, not my personal assets (or house!).

The point I'm making is that there are pros and cons both ways, and this is the very last kind of area where you want to listen to what the bloke down the pub says. The rules are complicated and change regularly, so get professional advice.

hugh

--------------------
Technical Editor, Sound On Sound

Hi Ben - I've been unable to get onto the forum for a few days so have just seen this.

Sorry to hear your news, but well done for writing such an honest and thoughtful post about your situation. It might make a few people think a bit...

For what it's worth, I'm a limited company and I make so little that in many ways it's more bother than it's worth; more accounting fees, more forms to fill in, more admin, PAYE, NI and so on. I'd go back to being a sole trader if I wasn't so vain about putting my occupation on forms as "Company Director" instead of the alternative "bone idle rhythm guitarist".

Cheers

Ron

I couldn't find the glasses clinking graemlin I wanted but I got these: go get plastered!

--------------------
Gear list: If you can't find it, grind it

Muppet sorry to hear about it. Nothing more to add than what everyone else has said.

Chalk up the experience and on to the next venture with what you've learned.

--------------------
www.youtube.com/eyeresearch

Hi
In my experience 95% of solicitors and 95% of accountants will give bland generalised legally-sound (their get-out) but inappropriate advice, which will leave you up ordure creek without a paddle which will work for you.

4% of solicitors/accountants will be bright enough, whilst uncomprehending of your situation, to know their job well enough to give you the appropriate advice you need.

And 1% will have had direct experience to be of real practical help from the outset, which as Hugh says, is what you need it.

Legal and accountancy advice at business start-up level is not rocket science, and it is essential to study up enough before you venture into a new business to know when to tell the professionals they are talking through their puckered posterior. Because they're in it to get themselves rich, mostly, and if you are a start-up business it will be the junior interns who will be allocated to deal with you.

Even your professionally qualified friends - they're even more likely to offer inappropriate advice even though they're not charging you anything for it. Its just that they don't know any better.

The way to suceed in start-up business is to be interested in 'business' - in doing deals and the creation of wealth. To spend 100% of your time in growing the business-success aspects of the business.

If you'd rather get your head down for 12 hours at a time over a mixing console or a computer workstation you're doomed.

Salaried staff like Hugh can play the limited company tax avoidance game to their own advantage I'm sure, and a business venture that has customers flocking to buy its products can survive the finding-a-good-solicitor/accountant lottery-odds/russian-roulette game-play I'm sure.

Small-print Disclaimer: I know nothing...

Quote PaulD:

---

Hi
If you start up on your own from scratch then forming a Ltd Company won't help in the slightest - the bank will only lend to the business if the directors personally guarantee the loan, certainly a large percentage if not the whole.

---

Exactly. In startup situations you simply won't GET limited liability. It may say that on all your stationery, but come on - bank managers aren't stupid (except the Northern Rock ones of course ).

The only way to raise credit without a positive business history is to put collateral against it. And if you don't have any busines collateral yet, then it's got to be personal, regardless of what your company is called.

Sorry to hear your tale Mup, and well-impressed that you're so able to bounce back and get on with life. It's all learning.

Quote PaulD:

---

Salaried staff like Hugh can play the limited company tax avoidance game to their own advantage I'm sure, and a business venture that has customers flocking to buy its products can survive the finding-a-good-solicitor/accountant lottery-odds/russian-roulette game-play I'm sure.

Small-print Disclaimer: I know nothing...

---

Nothing is about right... Hugh is freelance.....

--------------------
Ars longa, vita brevis, occasio praeceps, experimentum periculosum, iudicium difficile.

Hi again.
Practical advice @Muppet:
In an IVA or Bankruptcy situation a person's 'tools of their trade' are exempt from seizure, and in my case I was allowed to retain my whole video edit suite.

A court order will be needed to seize your possessions, so prepare yourself to resist this.
In my case I had got everything of importance away into an anonymous rented storage unit before the crash - leaving a very imposing assemblage of Pentium III computers, old 2GB SCSI drives and suitably-distressed (no label) £25 chinese stratocaster type kit lined up for the Bailiffs to cart off.
Which raised a grand total of about £800 at auction, to be set against the business's 100K debts to the bank

Quote redleicester:

---

Nothing is about right... Hugh is freelance.....

---

Hi
Oh my dear old cheese-rind. That's what I was implying:
Salary + "...play the limited company tax avoidance game to their own advantage" = freelance.

Hugh can turn in copy for the mag monthly, attend meetings as required, participate in conference calls etc etc, influence the magazine's policy, act on behalf of the magazine at trade shows... Indeed even call himself Technical Editor. For each and every monthly issue of the mag.

For which the Inland Revenue would dearly love to have him salaried. I mean its regular full-time employment, isn't it?

Well no. Because, as Hugh has posted above, HM Customs & Revenue only get to deduct tax on a fraction of the money sloshing around because of his accountant's considerable skills.

My apologies Hugh, for writing about a personal example in this case, but without spelling things out at length it seems there is more than a slight lack of comprehension skills hereabouts, with allusions passing well above the crash cymbals

#7 pursue corporate accounts. (they have budget)

The two or three corparate accounts I land a year, pretty much cover my expenses for the year, and allow me to pick and choose what projects enter my world.

#8 Don't quit your day job.



--------------------
G-Dub
Studio G-fx 15inch quad-core i7 Macbook Pro Logic913

Quote PaulD:

---

Quote redleicester:

---

Nothing is about right... Hugh is freelance.....

---

Hi
Oh my dear old cheese-rind. That's what I was implying:
Salary + "...play the limited company tax avoidance game to their own advantage" = freelance.

Hugh can turn in copy for the mag monthly, attend meetings as required, participate in conference calls etc etc, influence the magazine's policy, act on behalf of the magazine at trade shows... Indeed even call himself Technical Editor. For each and every monthly issue of the mag.

For which the Inland Revenue would dearly love to have him salaried. I mean its regular full-time employment, isn't it?

Well no. Because, as Hugh has posted above, HM Customs & Revenue only get to deduct tax on a fraction of the money sloshing around because of his accountant's considerable skills.

My apologies Hugh, for writing about a personal example in this case, but without spelling things out at length it seems there is more than a slight lack of comprehension skills hereabouts, with allusions passing well above the crash cymbals

---

It seems you're implying IR35 ruling issues, in which case I'm afraid once again Hugh is in the claer - the position at the magazine can easily be classed as freelance, just like a non-executive board post at a corporate level, and then when supplemented by BBC and other broadcasters dragging him in for training / presentations / lecturing, there is a clear demarcation of work done between different contracting organisations and thus not only is IR35 circumvented, but the legal and contractural position as director of his company and employee thereof is quite clear.

Much the same for example applies to my own company - freelance writing, TV, Film and multimedia commissions worldwide, and lecturing for several higher education institutions thereby placing the company well clear of any IR35 exposure, and anyone working for my company, including myself, as employees thereof, and could not either legally or morally be classifed as employees of any other organisation.

--------------------
Ars longa, vita brevis, occasio praeceps, experimentum periculosum, iudicium difficile.

Hi
Exactly
What I said: "because of his accountant's considerable skills."
And I'm glad you/your accountant share that crucial knowledge, which in part will be an essential factor in your company's continuing success

"...it is essential to study up enough before you venture into a new business to know when to tell the professionals they are talking through their puckered posterior."

Because the typical start-up business in the creative field ( like myself or The Muppet and no doubt many many others) is very unlikely (5% chance is my guess) to get given such broad-based advice if they go to Business Link or their bank's small business start-up advisor, and get sent to a local solicitor/accountant. Which is what will happen.

Its much more likely that they will be treated at face-value as wanting to spend 100% of their time/effort in getting the new business up and running, and will be advised accordingly - with excellent tax-compliance information.
But with very minimal or no tax-avoidance advice whatsoever.

Muppet

Many thanks for sharing you lessons so clearly. It's certainly given me something to think about. Like others I am really sorry for the way things have turned out for you.

I have been a bit more uncomfortable about the discussion following which seems to focus on ways of avoiding paying creditors. Particularly the suggestion that having a string of failures (with presumably unpaid debts for each) is not a disaster if the final business works out.

Surely it's not healthy for us as a community (economically or morally) to take on debts on the basis that bankruptcy or an IVA will protect us should the worst happen at the expense of those to whom we owe money. It's not only the banks who end up out of pocket from unrecoverable debts - other small businesses also lose out.

Of course it's easy for me to say that, I run a small recording business to keep myself amused between doing the washing up and fetching the kids home from school. I earn enough to but new toys but don't have a family depending on me.

Thoughts are with you Muppet.

J

Quote leslawrenson:

---

Quote paul tha other:

---

as the butt hole surfers say"its better to regret something you did than something you didnt do"

---

Unless that "thing" is sheep-shagging.

---

Don't paint with a broad brush just because some people take up with an ugly one!

Hi Muppet , Sorry to hear your news.
My company(not music)folded last year.
here are a coupleof things to remember regarding running a Ltd company.
It is not the "big get out of jail"card it seems.

When you first start up. To get credit lines people check you out....if they feel you have no history or accounts they ask for personal guarantees before going forward........

Most bank overdrafts for new starters are covered by a debenture.... they can come after you personally for the money...........

If you for one moment trade when you are insolvent you are liable for the debt......... Most businesses are SO insolvent before the owner pulls the plug.

Good News.....
As i handed the keys backto my (Multi Millionare) landlord.....(I was leaving 18 months prior to the end of the lease but was paid up to date)...he said..."It sucks don't it. I rememeber walking out the bank on my knees 15 years years ago after my business folded....... You just bounce back" The guy now owns a large.....LARGE portfolio of business premises in Essex.

The moral? ..... Don't go into Ltd Liability with eyes closed....
There is always again.

Best wishes.

Rg

--------------------
My Songs are at http://songramp.com/RonnieG

Hey gang!

Thanks ever so much for all your kind words (even the ones about shagging sheep!), it's nice to know I'm not the only one!

It's true about limited liability though and to be honest, even though I'm going through the mill with this, I really don't think my business acumen would have stretched that far! I set up as best I could, with no loans from bank or anyone, I have closed the accounts with no loss, all I have to worry about is paying what's owed to the landlord and getting what gear I can back from him. As for how I'll do that, I have no clue, but I'm meeting him in 20mins, so I'll let you know how I get on!

Will I start another business? Yeah I will and I can quite safely say that I'll make mistakes doing that too! But as most of you say, you learn from these things and if I came away from this having NOT learnt, I'd be less of a person for doing so!

Mrs Muppet has been a rock, and surprised me for not doing the whole "I told you so" thing, which is nice!

As for the future, well, I'm working full time (but self employed) for the agency, so that's a great weight off my shoulders, and I've already had a few offers come to me for engineering work. If (when) I get my gear back, it's going into the spare room and I'm writing for fun again. I want to get my album finished and for once, I cant wait to do it for the love of it, rather than a dead line.

Anyway, I've got to get my begging head on now for this meeting, I'll keep you all posted!

Thanks again people, you really are a top bunch!

Big love,

Muppet!

--------------------
The early bird may catch the worm, but it's the second mouse that gets the cheese!

All the best Mr Muppet, I don't live far from Hexham so if you need some muscle.

Quote crofter:

---

All the best Mr Muppet, I don't live far from Hexham so if you need some muscle.

---

Ha ha! Cheers mate, what I do need is a pint!

Just to let you all know, I've just come out of the meeting, the landlord has accepted my proposal and I get the keys back on Monday and all my gear!

All's well that ends well!

You have no idea how relieved I am right now! Pity I have to be somewhere all day now otherwise I'd be in a beer garden with a G&T!

Thanks again everybody!!

Mupp

--------------------
The early bird may catch the worm, but it's the second mouse that gets the cheese!

Gosh that's good news Muppy old boy, best of luck with it from here! Time for a fresh start and a new plan!

--------------------
Ars longa, vita brevis, occasio praeceps, experimentum periculosum, iudicium difficile.

stroll on.

Awesome Muppet! Congrats!

--------------------
James
"Never interrupt your enemy when he is making a mistake" ~Napoleon Bonaparte~

Quote the muppet:

---

Thanks ever so much for all your kind words (even the ones about shagging sheep!), it's nice to know I'm not the only one!

---

Sheep shagging?



--------------------
John - Sound-Link ProAudio
President - Federation Internationale des Chasseurs de Sons

Quote the muppet:

---

I've just come out of the meeting, the landlord has accepted my proposal and I get the keys back on Monday and all my gear!

All's well that ends well!

---

Congratulations Mupp.

I really hope it all works out for you in the future.

--------------------
John - Sound-Link ProAudio
President - Federation Internationale des Chasseurs de Sons

Quote the muppet:

---

Quote crofter:

---

All the best Mr Muppet, I don't live far from Hexham so if you need some muscle.

---

Ha ha! Cheers mate, what I do need is a pint!

Just to let you all know, I've just come out of the meeting, the landlord has accepted my proposal and I get the keys back on Monday and all my gear!

All's well that ends well!

You have no idea how relieved I am right now! Pity I have to be somewhere all day now otherwise I'd be in a beer garden with a G&T!

Thanks again everybody!!

Mupp

---

Nice one! I'm glad to hear you're on the up... Like I said earlier, you're more than welcome to pop in if you're in my neck of the woods (TEDCO, Jarrow).

Have a bloody good drink today... You deserve it!

Cheers,
Peter

--------------------
Composer, Producer, Sound Designer
www.universal-sound-design.com

Well done chap!

--------------------
"Over fifteen years without a slogan"

Quote PaulD:

---

Salaried staff like Hugh can play the limited company tax avoidance game to their own advantage I'm sure

---

Just to correct one point here: I'm not salaried staff in the way you suggest. My salary comes from my own limited company, not SOS. I have a contract to supply services to SOS, along with various other clients. Equally importantly, I don't avoid paying tax I merely try to minimise what I pay.

Hugh

Quote PaulD:

---

For which the Inland Revenue would dearly love to have him salaried. I mean its regular full-time employment, isn't it?

---

No, for the simple reasons that it's not all I do. Not even a third of what I do... I have many other regular and irregular clients generating lots of other invoices.

hugh

--------------------
Technical Editor, Sound On Sound

My heart and respect goes out to you!

It was extremely brave of you to post this and i know that you have really given me alot of things to think about

You seriously owe me one! i was planning on opening a recording studio in the future with some friends from college! and you have now armed me with information that will invaluble to myself in the future!

Thank you so much for posting your advice and tips!

--------------------
www.myspace.com/adbobsuk
www.myspace.com/ajconnell

dead chuffed for you muppet...

one piece of final germane advice, whatever accommodation you reached with the landlord, make damn sure you hold up your end of it...... even if it means no beer , no new strings, and no saturday nite out....


best wishes for the future.

Max

--------------------
if you don't know who i am, i aint gonna tell you.