Self-employed face debt risk

A growing number of self-employed people risk not getting a clear picture of their business because of their failure to keep proper records of financial transactions.

Rather than opening a business bank account, and perhaps one for client payments, the self-employed too often use their personal accounts to prop up their business.

Issuing these warnings, the Consumer Credit Counselling Service said such a dangerous mix of business and personal finances was often made by those in debt.

"Many will often take out loans and credit cards to support their businesses during tough times, which can make their situation worse," said CCCS's Geoff Waugh.

"Others will use the same bank account for both business transactions and

day to day spending....[foregoing] a greater degree of protection."

The debt charity's warning came after a recent YouGov survey found that, partly due to redundancies, 1.2million more people became self-employed during the recession.

Callers to CCCS's free helpline (0800 975 9559) for the self-employed can speak with a specialist for advice on personal debt as well as drawing up business budgets.

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