income tax during the one year bankrupt period

[gill]

Does any know if tou pay income tax during the one year period you are bankrupt.

[Oliver]

Hello

THe income tax will be paid seperately for you by the OR. This will mean that your taxcode on your payslips will be a zero tax code.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[gill]

I am self employed how will this effect me

[Oliver]

If you are self-employed, your duty to pay tax directly to HM Revenue and Customs will no longer apply to the tax year of bankruptcy or any previous year. You start paying tax directly from the following tax year.



Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[MelanieGiles]

Income tax is not payable from the time you are bankrupt to the end of that fiscal year. Instead, the tax saved is paid to the Official Receiver for the benefit of the bankruptcy estate. This is an Inland Revenue ruling, and has nothing to do with insolvency legislation.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[gill]

so the amount of tax for the year of bankrupcy is to be given to the receivers office and not the inland revenue.should my accountant be adviseing how to to this

[MelanieGiles]

If you are self-employed, and subject to either and IVA or bankruptcy proceedings, the tax due for the current fiscal year is not payable to HMRC but forms a claim in your IVA. Your accountant ought to be aware of this.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sarah1975uk]

Melanie

Interesting. So when you enter an iva does this mean my tax code goes to zero and paid into the iva? If so for how long as iva is longer? or does this just all relate to bankruptcy?? Thanks Sarah x

Thank you for eveyone's help & Support xx

[MelanieGiles]

No - this happens in bankruptcy only if you are subject to PAYE. If you are self-employed then all of the tax due for the current fiscal year forms a claim in the proceedings, and you will not pay any tax over to HMRC until the following year.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sarah1975uk]

Melanie

Does this mean that you would also have to pay surplus into the bankruptcy as well as the tax on your earnings for that year?

Thank you for eveyone's help & Support xx

[MelanieGiles]

Not sure I understand what you mean Sarah. Are you PAYE or self-employed?

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sarah1975uk]

sorry melanie, will try and explain myself better. Ok when in Bankruptcy i understand you have IPA for you tp pay percentage of your surplus income into Bankruptcy. Do you have a IPA as well as having nil tax code ? sorry for being so thick!

Thank you for eveyone's help & Support xx

[scaredkez]

yes you have both if you have a surplus
kerri

not that you should note any difference other than you receive your tax instead of paying it.

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[MelanieGiles]

Sarah - you are not thick. Even I struggle to get my head round this strange Inland Revenue ruling sometimes!!!!

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[sarah1975uk]

thanks Melanie you are a true star. So helpful always and i really appreciate it xx

Thank you for eveyone's help & Support xx