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les
Starting Member
9 Posts |
 Posted - 06 June 2009 : 08:09:43
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I was made bankrupt on 2.5.2008 and (according to the on-line Insolvency Register) automatically discharged on 2.5.2009. I have a BRU until 7.10.2011 but no IPO/IPA. At the time of agreeing the BRU I was told that I had nothing to pay back as I didn't have enough disposable income. The OR's office have recently be in touch regarding paying back an amount I received relating to PAYE during the period I had an NT tax code. This could amount to around £1500.00 or more. Can they still request that I pay this money to them, even though I have been disharged and no IPO/IPA had been implemented prior to the discharge? Under what legislaton? I understand that they cannot issue an IPO/IPA after I have been discharged, so how will they be likely to charge this amount to me? By invoice, or other means? Will I have to pay it? My circumstances have changed since going br and I have had to cease employment due to permanent ill-health, so my income has greatly reduced and I don't know how I will be able to afford to pay this money back. Any help would be gratefully received.
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 06 June 2009 : 08:48:51
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Hi,
Was the £1500 due to having a NT tax code i.e. this would normally have been income tax but was paid into your account as you had a NT tax code or was the amount from something else?
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RHB
Senior Member
1159 Posts |
Posted - 06 June 2009 : 10:41:33
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| The reason you don't pay tax is so that that money can go to your creditors, not for you to have as extra spending money. |
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les
Starting Member
9 Posts |
Posted - 06 June 2009 : 11:36:48
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Hi all.
Thanks for your responses.
Yes the £1500 was due to having an NT tax code only. When I went br I was off work sick and only getting half pay. I returned to work for 3 months between June and Sept 2008 and was paid full pay from 23 June to middle of Jan 2009. The £1500 relates to tax I should have paid from August 2008 to Jan 2009. However, I completed a new I&E form in Sept 2008 which showed my income including the extra amount due to the NT tax code. I was told when I signed my BRU, which started on 7.10.08, that I had nothing to repay as I had insufficient excess income (as per the new I&E form I had completed). My husband (who is not bankrupt) had also been unable to work from November 2008 to March 2009 due to needing an operation, so was unable to give me any money towards the household bills (he is self-employed and was unable to claim any benefits for the period he was off sick). The extra money I received in my pay was used to support us both when my income reduced to SSP only from the middle of Jan 2009 until my husband started receiving his earnings at the end of April 2009. Because I was told I did not have to repay any money, I presumed that I would be ok to use the extra money in my pay packet to help pay the bills, although I know that normally this should have been repaid to my br estate to go towards my debts.
My question is how can they now request payment of this money? My discharge became automatic on 2.5.09, so they cannot issue an IPO/IPA as I would have to still be an undischarged bankrupt for them to do so.
Can they reverse my discharge from bankruptcy in order to issue an IPO/IPA? If so, under what legislation? If not, how will they claim this money back?
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RHB
Senior Member
1159 Posts |
Posted - 06 June 2009 : 12:34:15
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| The point is that by being out on a nil tax code you are in fact in an ipa therefore I think iy unlikely you will get away with not paying it back. After all, if it wasn't going on an ipa it should have been paid in tax & therefore was never "yours" |
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les
Starting Member
9 Posts |
Posted - 06 June 2009 : 12:43:29
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Thanks for your thoughts RHB. However, to be in an IPA the OR and I would have to have signed the agreement. Seeing as no agreement has ever been mentioned, let alone signed, I do not have an IPA at this time. Because I have been discharged from bankruptcy, the OR cannot now issue an IPO or IPA unless they can, somehow, reverse my discharge. The only way I can see that they could be able to do this is if I have not fully co-operated with them, which I have. So again, how will they be able to 'bill' me for this money?
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 06 June 2009 : 13:07:48
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I think you get the nil tax code anyway, depending upon the time of year you declare BR.
Because you don't pay tax at all during that period, you should pay it across to the OR, so I would think you are still liable for that sum.
Hopefully one of the experts will be along with further advice.
The glimmer gets brighter all the time
Jan
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les
Starting Member
9 Posts |
Posted - 06 June 2009 : 13:09:47
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| Thanks for that Kallis3. I'm hoping an expert can throw more light on the subject. |
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RHB
Senior Member
1159 Posts |
Posted - 06 June 2009 : 13:23:13
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| Were you told you were going on a nil tax code? |
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RHB
Senior Member
1159 Posts |
Posted - 06 June 2009 : 13:25:56
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| It would make more sense if the tax money went straight to the OR's office from your pay packet & then there would be no temptation to spend it. |
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les
Starting Member
9 Posts |
Posted - 06 June 2009 : 13:29:10
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| Yes. And I understand the reasoning behind it, ie that HMRC should be treated like any other creditor so that any PAYE I am due to pay in the tax year I was made bankrupt is treated like any other debt I owe. I also understand that the extra money in my paypacket should have been claimed back via a NT tax only IPA/IPO, but the OR told me that I did not have sufficient excess income to do this, even with this extra money. No IPA/IPO has been initiated as yet and now that I have been discharged from br, an IPA/IPO cannot now be raised. However, I am concerned that the OR may be able to have my discharge reversed in order to raise an IPA/IPO. |
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les
Starting Member
9 Posts |
Posted - 06 June 2009 : 13:31:30
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| I agree RHB. The problem now is that because I was told I had nothing to repay, I have used this money to suppliment future months when my income went down to considerably less that it was when I went br. |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 06 June 2009 : 13:47:35
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I totally agree that this money should be paid straight across to the OR rather than you having to do it.
However, I am still of the opinion that it will have to be paid across, but that is just my take on the matter and may not be correct at all.
The glimmer gets brighter all the time
Jan
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RHB
Senior Member
1159 Posts |
Posted - 06 June 2009 : 13:51:20
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| The sticking point will be that the money was never actually yours I suspect. If the OR office didn't take it then presumably the tax office still could? |
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les
Starting Member
9 Posts |
Posted - 06 June 2009 : 14:02:28
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| Ok, thanks for your thoughts. |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 06 June 2009 : 18:29:37
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Yep, either this money is going to be claimed by the OR or HMRC.
The ORs 'may' have powers similar to HMRC in that they are able to reclaim money for the period that you were BR at a later date in the same way that HMRC can claim repayments of taxes several years later.
If you don't have the money then you should speak to the OR and explain the situation. |
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OR's office have recently be in touch
