Photo by Christian Erfurt on Unsplash

Why do more UK people go bankrupt in January than the rest of the year combined?

James Bond

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The answer is 4 words. The Christmas debt trap

I am writing this article after 31st January- the deadline for submitting your taxes in the UK for self-employed business owners. I tell everyone about this in February and nobody takes action and guess what this time next year the same people are in the same boat.

Did you know that more people go into debt in January than the rest of the year combined? On top of that more businesses in the UK go bust in January than the rest of the year combined. This causes more stress to Joe Public than many other things. Financial stresses can pour petrol on the emotional fuse. Never forget that financial stress is a major cause of relationship breakdown.

So, what is the Christmas debt trap?

Between 30th November and 2nd January, Joe Public spends a fortune on things related to Christmas. Then Joe Public realizes on 2nd January how much he has spent and, in many cases, ends up taking up to November to pay it off, and then the cycle repeats itself. (1.)

Why is a fitness trainer talking about it?

The number one cause of obesity is poverty. In 2008 I wrote a blog on this and I was pasted for it. However, in 2015 the Fabian Society released their report called Hungry for Change and everything I wrote in my 2008 blog was confirmed (2.) A classic case of I told you so. This is why I don’t charge much for my fitness programs.

It’s very common for people to say to me in January that they don’t have the money for any form of training program.

Why does it hit self-employed business owners more?

The tax year runs from 6th April to 5th April. You then have until 31st January of the following year to pay your taxes. However I am sure you are aware that many businesses are dead in January, they have no customers because everyone has spent a fortune at Christmas. However, for the self-employed at the end of January, you have up to 5 big bills.

· Your taxes.

· You have to pay your VAT (Value Added Tax) bill.

· You have to pay your accountant.

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