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Joanna.1
Starting Member
3 Posts |
 Posted - 20 February 2011 : 05:24:54
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I was declared bankrupt in 2008 and have recently received a letter from HMRC saying that I owe £1300 in unpaid taxes for the years 07/08 and 08/09 the letter demanded that I paid the full amount by 04.04.11.
I contacted the office and they said the system wouldn't allow for it to be collected through the next financial years PAYE. I told them that I had been declared bankrupt and they said that they had been contacted by the Insolvency Service at the time. My issue was forwarded on to another department and was told that they would call me back.
When I phoned the next day I was told that it can take up to 4 weeks for this to be investigated in which case, if they expected me to pay back the full amount would give me approx 3 weeks to find the money.
I was told that some of the tax may be written off but they said it would be for 2009??
I have been looking at several websites and it seems that not only should any tax I owe up until my bankruptcy on 17.07.08 be written off but I shouldn't have paid any tax for the remainder of the financial year.
I feel that the demand for the money is a bit of a 'scare tactic' and want to have the correct information for when they contact me next.
Any advice would be gratefully welcomed. |
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Blackie
forum expert
United Kingdom
565 Posts |
Posted - 20 February 2011 : 12:44:50
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Hi Joanna 1
You are correct in thinking that any tax liability prior to your bankruptcy would be written off and any liability after 17th July would be your responsibility. I can not understand why you think that no tax should have been paid for the rest of that financial year unless your tax code was cganged to nil and any tax due was redirected to the Insolvency Service. It is unlikely that this would happen if you were self employed and you should have continued to pay tax as in previous years.
All the best.
John Blackadder
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Joanna.1
Starting Member
3 Posts |
Posted - 20 February 2011 : 15:10:37
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Hi John,
thanks for the info, great news already!
The only reason I was querying not paying anymore tax is because of tax codes being changed to nil. Until I looked into this last night I never realised that that was what happened.
When I was declared bankrupt I spoke to the Insolvency Service Trustee who said that my tax code would change and any tax would go to them instead of HMRC, as this didn't directly affect my earnings and with being so busy dealing with losing my home and all of the other stresses that came with it I never questioned the fact that tax was still being deducted.
The Insolvency Service told me that they would inform HMRC who would then deal with what I now know is a 'nil tax code' and that I didn't need to do anything.
Later on in the year the Insolvency Service then contacted me as they wanted to apply for discharge, the letter told me not to contact them for any reason as this would slow the process down. I assumed at the time that the tax code had been changed.
The only reason I am questioning this is the information that I read on insolvencyhelpline.co.uk which says:
"So if you are employed and paying tax under Pay As You Earn (PAYE), you should ask your tax office to put you onto a 'Nil' tax code immediately after the bankruptcy order. You should then be paid without income tax taken off for the remainder of the tax year. If for any reason this does not happen, and some tax is deducted after bankruptcy, this should be refunded to you by the Revenue. However, if you move to a different employer, this rule ceases to apply and tax should be deducted on an 'emergency' basis."
I'm not self employed but during that year I always had two jobs at any one time as I work for the NHS on a 'bank basis' so am never guaranteed regular hours.
I hope this all makes sense!
Many thanks,
Jo. |
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debtinfo
forum expert
2826 Posts |
Posted - 20 February 2011 : 16:59:51
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| you are correct, HMRC is wrong, there have been several threads about this recenty, you just need to get through to someone at HMRC that specialises in bankruptcy |
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Joanna.1
Starting Member
3 Posts |
Posted - 20 February 2011 : 19:35:24
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This is all great news! I might actually sleep tonight without worrying.
I'll have a look at the other threads and give them another call tomorrow, hopefully I won't be fobbed off again with 'don't call us, we'll call you'
Cheers guys!
Jo.
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Tax demand from period when I was bankrupt ?
