Sorry just to be clear, does that mean i dont pay any tax until next april? and then i presume i have to find the money to pay the missing tax in a lump sum which ofcourse i wont have. Im not clear on how it works. I have my court date on the 9th august. Thanks Anna
hi anna - you will get a nil tax code on your payslip and then you will have to set up a direct debit or standing order to moonbeever until the end of the financial year (end march 2012) - the OR will send you all the relevant paperwork after your phone interview.
This is how I believe it goes…..after you go bankrupt any income tax you would normally pay up until April or the end of your bankruptcy…which ever comes first…is paid to Moonbeaver. You will get a tax code..NT..Nil Tax..that will show up on your payslip. After that you will get a new tax code and pay tax as normal.HMRC wrote to me with my new tax code in April and told me to inform any interested parties of the change.
The OR has an arrangement with HMRC that the tax that you normally pay can be diverted to the Insolvency Service only until the end of the financial year in which you declared or were made bankrupt. In reality this means that your tax code is altered to nil and you would receive the extra money in your pay packet. However the element of your income that would normally be paid to HMRC will have to be paid to the OR by way of an IPA. At the end of the financial year your tax code will revert to what it was prior to your bankruptcy and you continue to be taxed at source as per normal. Do not worry. You will be no worse or better off and HMRC will not try and recoup any tax paid to the OR. You are simply paying another Government body during this period.
Hope this helps.
John Blackadder Bankruptcy365
For help and advice on the easiest and most effective way to a debt free future, please go to www.bankruptcy365.co.uk.
Tax code
Posted - 27 July 2011 : 09:25:51
