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| T O P I C R E V I E W |
| debtrider |
Posted - 12 January 2010 : 14:53:09
Just wondering if anyone knows who you pay tax to in your first year of bankruptcy. I went bankrupt on 20th October 2008 but still continued with my self employment. So from 21st October until the end of the tax year 5th April 2009 I assume I will have to pay tax.
If I have to pay tax to the OR will it still be calculated the same way as the inland revenue would do it. Will I still be entitled to me personel allowance of £6035.
I have been told that my case as now been passed th RTLU so what does this mean.
I have done my accounts from 21st October to 5th April 2009. Should I send these off to the OR together with the bill I had from the tax office for year 2008/09, and let them sort it out.
debtrider |
| 15 L A T E S T R E P L I E S (Newest First) |
| debtrider |
Posted - 27 January 2010 : 11:04:46
Looks like my tax liability as been sorted out at last "I think" with the inland revenue. They phoned me yesterday at 8:30am and said I would not have to pay any tax for 2008/09 due to my bankruptcy. That's the good news, now for the bad. Based on my tax liability for 2008/09 I would have to pay on on account on Jan 31st 2010 and July 31st 2010. Anyone who does not understand what I am talking about, I will try and explain it as simple as possible, because I have difficulty in getting my head around it.
For self employed people any tax liability from the previous year will be charged again the following year in 2 installments. So in other words I am paying my tax in advance it's called payment on account.
I wish I could understand why this happens and if any experts out there can tell me then I would be very grateful.
If you earn less during the year then this payment on account can be refunded or deducted from your tax bill. You can also appeal against the payment on account if you think you are going to earn less for that tax year. The catch is though if you do appeal and lower your payment on account, and you end up earning the same as the previous tax year or more. Then HRMC will charge interest on any under payment.
See I have even confused myself now.
I Know these are the rules but I don't understand why we have to pay tax on money we have not even earned yet. This payment on account seems very unfair, but I am sure there is some logic behind it.
It's a good job I put my tax on to one side and I have the money to pay this "payment on account".
debtrider |
| Skippy |
Posted - 15 January 2010 : 15:03:20
Good luck. Our company accountant is going to look into my tax for me to see what he can work out, and if necessary I can then go back to HMRC - oh joy!
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
| debtrider |
Posted - 15 January 2010 : 14:27:08
Hi Skippy13. Don't worry as it is always good to hear problems others have had with the incompetent HRMC. Glad it's just not me.
In most cases it's probably not the staff at HRMC who are to blame. It's probably caused by poor staff training, and not really having enough resources to cope with all enquires.
Still never mind I will send them one more letter and sit back and wait.
Let you know how I get on.
debtrider
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| Skippy |
Posted - 15 January 2010 : 13:09:36
I can quite believe that gettingoutofdebt - and the ones they do speak to don't always get an answer!
He couldn't tell my why I'd underpaid, but he could tell me that they think I'll be underpaying in the next tax year as well so reduced my tax code accordingly!
What other company could get away with taking money 'just in case'.
Anyway, sorry to hijack your post with my rant Debtrider!
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
| gettingoutofdebt |
Posted - 15 January 2010 : 12:01:16
I don't envy anyone trying to contact HMRC - HM Revenue and Customs 'missed 44 million calls' - http://news.bbc.co.uk/2/hi/uk_news/politics/8460182.stm
quote:
HM Revenue and Customs failed to answer about 44 million phone calls last year, Whitehall's spending watchdog says.
The National Audit Office called the performance of 31 customer "contact centres" during 2008/09 "unacceptable".
Despite employing the equivalent of 10,500 full-time staff at a cost of £233m, it still failed to pick up 43% of the 103 million calls received.
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| Niobe |
Posted - 15 January 2010 : 11:17:56
That's not good Skip.
How can they say you have underpaid?
Buckle your seat belt Dorothy, 'cos Kansas is going bye bye.
Jan
xx |
| Skippy |
Posted - 15 January 2010 : 11:05:49
They're not much better with a straightforward query, so good luck to anyone with a more difficult question! I had a new notice of coding for April and they have taxed me for company benefits (I don't have any) and when I queried it I was left hanging on for ages. They also say I have underpaid so I've got that to sort out and I'm not optimistic!
Good luck Debtrider, I hope you get this sorted out x
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
| debtrider |
Posted - 15 January 2010 : 10:52:48
In all honesty I am sick to the back teeth of trying to contact the HRMC and getting know where. It is costing me money in phone calls as they leave you hanging on to a 0845 number, before you get to an operator. When you get through they do not know the answers to your questions. I have phoned them many times and I have sent them letter (recorded delivery) which I have had no answer to. I have spoken to a technical advisor who supposed to be the experts, who gave me wrong information.
I am not trying to avoid paying tax, but if they can't be bothered to answer my queries then I can't be bothered to keep on chasing them.
I will probably send them another letter telling them how inefficient they are and explain my situation for the 6th time. After that I will just leave it, as my patience will only stretch so far.
I have a good idea how much I owe them and keep it on one side. If they come back to me and ask questions about it then I will tell them what I think, and remind them of my constant contact with them with no joy.
debtrider
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| debtinfo |
Posted - 14 January 2010 : 19:06:16
HMRC do have a specific bankruptcy department, im not sure how you get to them though, might be worth an ask next time you speak to your local office |
| debtrider |
Posted - 14 January 2010 : 12:13:39
Spoken to the OR about all these problems with HRMC and they confirmed everything to me. They said any pre bankruptcy bills should be sent to them and post bankruptcy to me and paid to HRMC.
The OR just said refer HRMC to them if I have any problems, with regard to the HRMC trying to get money out of me pre bankruptcy.
I have accounts for pre and post bankruptcy. Just waiting to hear from the HRMC once again. I can only think they will have to send me 2 self assesment forms to fill in. One for pre and post bankruptcy. So they can workout how much i owe them and then send the pre bankrutpcy bill to OR.
What a Game
debtrider |
| leakie |
Posted - 14 January 2010 : 07:18:39
Hi Debtrider
I had a few run in's with HRMC over this
They wanted me to do the same, ( The whole tax year)
I reminded them that my Old Business was no longer,and any Tax owed was included in the BR,
They then implied that was not the case??
finally they accepted this, but insisted that I supplied them with the info and sent me a seperate tax return for the pre BR accounts.
which of course I did not have, as the OR had them.
Then told the OR will let me see the old accounts, in there office,
I checked with the OR, and she just laughed, Told me to let HRMC that if they require them the are quite welcome to see them for themselves if they wish.
So that is where I left it.
I have not hear anything since.
I have submitted post BR Tax return,
Hope this helps,
All the best
Leakie
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| debtrider |
Posted - 13 January 2010 : 09:33:11
Thanks for the confirmation on this. Leakie is correct in saying that the tax office does not seem to know the rules in these circumstances. I have phoned the tax office on a few occasions and know seems to know the answers. Someone in the technical department of the tax office gave me the lastest information, which is still wrong by the sounds of it.
I am going around in circles and there is no point in phoning them again, because I will get the same answers.
I have sent them a letter a month ago explaining my situation but not heard anything from them since. All they have done is sent me a tax bill for 2008/09, which is not correct because it includes tax owed prior to my bankruptcy. I went bankrupt on 20th October 2008 so dare i say it again, I am only liable for tax from 21st October 08 until the end of the tax year 09.
What shall I do next I wonder, send them another letter?
debtrider |
| gettingoutofdebt |
Posted - 13 January 2010 : 06:53:54
Yep, debtinfo is correct as you are self employed.
Sorry for the confusion  |
| leakie |
Posted - 13 January 2010 : 06:10:12
Hi Debtrider
I believe that Debtinfo is correct on this one,
I will be paying HRMC, I was made BR Jan 2009, and new company was started then,
I did have a bit of a problem to start with as the local office were not sure of the rules with regards to BR.
All the best
Leakie |
| debtinfo |
Posted - 12 January 2010 : 21:03:55
sorry that is not the case. Your tax is only payable to the OR if you stay in the same employment. For self employed people a new business is started the day after the bankruptcy order and so you have "changed emplyment" therefore in your case the tax should be paid to HMRC nor the OR |
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