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This is something I have been wondering about.

At work, we operate a bonus scheme, where anything above a certain level of sales, 10% of the excess is paid to the employees equally. Sometimes, if we have had a really good month, we can get an extra £400. Having said that, the bonus is not guaranteed, and we don't always make it to the required level each month

My clause says that I have to pay 50% of the take-home amount of this once it exceeds 10% of my normal take-home pay. I don't have a problem with that.

My issue is that obviously my next annual review will be January 2009, therefore the P60 will be my 07/08 one. 9 months of this will be pre-IVA. I assume that anything pre-IVA will not be accounted as my income for calculating my IVA annual review? How does/will my IP know this? Obviously in future years, it's clear enough, but I am just wondering about the first annual review.

i.e. my salary to date is probably about £17,000 (for 9 months), but my annual salary before any bonuses is £18,790. Therefore my bonuses to date are just shy of £3,000 - I assume I this won't be calculated when my annual review comes around?

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The IP will not take into account what bonuses you earned before the IVA was entered into.

It will have been your responsibility to keep aside half of your net post-IVA bonuses so that these can be passed over to the IP in due course.

Your annual review will only though take your basic salary into account when deciding whether to increase the regular monthly payment as the bonuses will continue to be caught by the 50% net clause.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

So, for example if I earned no bonuses in January, February or March (which is possible), and my P60 looked a little "odd" because of this, it wouldn't cause a problem?

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I disagree - I was due a performance bonus in July 2007. My IVA commenced / agreed in September 2007 - when I finally received my performance bonus after alot of union intervention with the company and agreement with the pay deal etc it was November 2007. I wrote to my IP stating this and copied them into my payslip which clearly showed the perf bonus should have been paid in July - however they insisted that this was a windfall and had to be put into the IVA pot in full and not as a bonus of 50%! Cross to say the least and therefore be careful!

Lulu

My IP has agreed that my bonuses fall under the 50% rule, therefore I am not too concerned about that.

Obviously once you have been in an IVA a full year, it is easy to see what your net pay is, because your gross pay, tax and employers NIC are all visible. It's just in the first year where some of it is pre-IVA and some during IVA, I don't want to be sat here in 12 months having 50% of my bonus from April 2007 to December 2007 to pay over.

I guess the easy way to resolve this is to send a copy of my payslip when I send my cheques off for any bonus/overtime.

Chris

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In the first year of the IVA, you should submit details of your post-IVA wageslips to the supervisor so they can work out if you owe anything. As previous posters have confirmed, additional amounts earned prior to the IVA will not be taken into account.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

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