Treatment of Unpaid tax in Bankruptcy
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If you are going or have gone bankrupt, you may have tax which you have unpaid and also tax which you are due to pay on account in July this year. For statement of affairs purposes and for debts that you owe, you need to include both the unpaid tax that you currently owe and also the tax which is due to be paid on account.
In addition to the tax which is not going to be paid, the Official Receiver will write to the HMRC to advise of the bankruptcy and this will result in the HMRC issuing a nil tax code if the bankrupt is on PAYE. The code lasts for the rest of the tax year in which you were made bankrupt.
The effect of the nil tax code is that the employer will not take any further tax from you for that year. The reason for this is HMRC will be recovering the whole of your tax for the current year.
It does not follow that your employer will know that you are bankrupt as a nil tax code can be issued for a number of reasons. It also does not mean that not tax is due.
Any tax that you do not have collected via the PAYE system will now be collected by the Official Receiver via an income payments agreement of order. If for instance you have an income payments agreement for £200, and you have tax that is not being collected for £300, the Official Receiver will collect the £200 and the £300. The taking of the additional tax will cease as soon as your tax code changes again, at the start of the new tax year.
If you have a tax demand from the HMRC which you cannot deal with then firstly take professional advice. Do not ignore the fact that you can’t pay it.
Contact Steve Thatcher of Help With Debt (UK) Limited a total debt solutions company. If you have any debt problem whatsover either personal or corporate make Steve your first call all advice is free. Finally if in the UK and you need a friend to speak to call 01162171406 Visit http://www.helpwithdebtuk.com Article Source:http://www.articlesbase.com/taxes-articles/treatment-of-unpaid-tax-in-bankruptcy-1728092.html
For all further reading see http://www.helpwithdebtuk.com
For personal contact email sthatcher@helpwithdebtuk.com
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