www.iva.co.uk

Is a Tax rebate classed as a windfall? I know i can keep up to £500 but is there any way of keeping more?

My very limited understanding is that it depends on your arrangement as they are individual but you can keep up £500 but if your windfall is over then you pay it all over - e.g. £499 and keep it all but £500.01 and hand it all over not just the penny. I do stand to be corrected and I'm sure someone will advise soon!!

If the tax rebate relates to a period of post-IVA trading then yes you can keep the rebate. If, however, it relates to pre-IVA trading then it will be a windfall which you need to hand over to the Supervisor.

i am the person who placed original question. I have just registered.

Well i have contacted my iva provider and they said i could keep anything up to 500 and anything else they keep. so if its 1000 they they get 500 and so do i.

Now more questions im getting rebates for 08-09 and 09-10 im paye. Both are comeing in one cheque. Are they classed as 2 rebates (for 2 different yrs) or one (as its one cheque)?

as i started my iva in june 09 is my rebate for 08-09 to be considered as a windfall?

Any advise would be appreciated Many Thanks

As you say that you are on PAYE, then I would deem the money to be a windfall - unless there was something wrong with your tax code which caused you to struggle to make your contractual level of payments.

Thanks for ur quick reply. Just so i have absolute understanding.

Pre iva tradeing is before i set up iva and post is any date after setting up?

Just want to make sure before i go blabbing to my ip lol

That's is correct - but for tax purposes pre-iva is deemed to be the full tax repayment due in the tax year in which your IVA was accepted.

ah right so because im paye its all classed as windfall? pre and post iva set up? Do you think they will be classed as 2 or 1 windfalls.

thanks

If the payments are made in two lots then this will be two windfalls.

with ref to ur tax code reply, there was an error. I have been paying emergency tax(br) for the las 18months it is now and should have been the normal 647L or something like that. Do u think i should try and use that to keep some money if any

Thanks again

Most definately - if your IVA payments were worked out on you having a normal personal allowance. Best to speak to your IP directly about this, as they will have detailed knowledge of your case.

Let us know how you get on.

ok thanks for that. my iva payment has been worked out from my take home earnings so do think it would make that much differance but will let you know.

Again thanks alot

I wonder why your IP did not notice that you were on a basic rate coding and not 647L. Basic rate is when people hold two jobs and get all their personal allowances in one of those positions. Did they not have your wage slips when calculating your income?

i thought that to. When i started my current employment i was still being paid for three months by my previouse employer. so at the time my tax code was correct. that all went on july - sep 08. i started my iva july 09 so it should have been noticed.

Now that your tax code has been corrected your net pay should increase by over £100 per month from what was listed on the original I&E. Your IP may now seek this money so you should have a word with them especially since this should have been noticed earlier.

We read all wage slips to see if the tax codes are correct but also to check on deductions for SAYE schemes, pensions, season ticket loans, union dues etc. I am surprised this was not noticed as a BR tax code should stand out like the proverbial sore thumb as it implies other undeclared income from a job or in some cases pension income.