Please help - confused about SOA

tadsa

One final question - sorry for going on - with regards to the personal tax allowance, will the full tax allowance be applicable for the period 18 August 2009 to April 2010 or will it be adjusted to account for the 8 months.

You are being so helpful - I really appreciate it - how anyone goes BR without the help of forums like this I'll never know

debtinfo

i would imagine that it would be pro rated

fiveyearplan

Yes, I too think it would be pro rata.

Richard_S

Hi tadsa,

A little light bed time reading:

31.7.8 Employment and self-employment
Bankruptcy cases where the bankrupt is in paid regular employment and has a surplus of income over (reasonable) expenditure will be the most likely source of any IPA/IPO. However, where a bankrupt is self-employed, although the income he/she receives may be a variable amount each month, it should still be possible for the official receiver to identify if the bankrupt is likely to have a surplus of income after allowing for reasonable expenditure. This may be done in a number of ways and may require the official receiver to review the bankrupt's circumstances more frequently than in cases where the IPA/IPO is based on income received as a result of being employed.
Examples of possible means by which surplus income can be claimed from a bankrupt who is self-employed include considering an average of the bankrupt's income received over a given period, through analysis of any records or accounts supplied to the official receiver, and then agreeing a monthly repayment with the bankrupt based on the average surplus income calculated.
In other cases where the bankrupt's income varies on a seasonal basis, it may be possible to agree an IPA which covers only the specific period when the bankrupt is in receipt of surplus income (e.g. for a six month period in the summer or winter depending on the nature of the seasonal income).
In circumstances where the bankrupt is in receipt of staged payments (such as those received by building contractors) or is paid on a commission basis (such as a self-employed sales person) their basic salary may provide insufficient income for an IPA, but in conjunction with staged payments/non monthly commission income received may provide adequate surplus to agree an IPA. In these circumstances if appropriate, the official receiver could propose an agreement with the bankrupt for him/her to pay (for example) bi-annual or annual contributions. In these cases the official receiver can agree the particular payment terms within the IPA, to be signed and agreed by the bankrupt.
What must be remembered in all cases, as stated at paragraphs 31.7.2 and 31.7.5, is that the length of any IPA, however the payment terms within the IPA are agreed, cannot exceed three years from the date of the commencement of the agreement.


Quoted from:
http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch73-84/Chapter77/part2/Part2.htm


This doesn't cover a self employed NT Code but its in the Technical Manual somewhere.


Richard

Richard_S

debtinfo wrote: »

you start a new business after the bankruptcy, it is not a continuation of the previous business. The tax liability for the old business is included in the bankruptcy, from the date of the bankruptcy you have a new tax liability which the OR will not collect and that you will pay in the normal way to HMRC

Hope richard does not mind me answering for him - The NTcode that PAYE people get is not to add to your income but is instead collected by the OR. As Richard says you need to budget to live within your net income

Hi debtinfo,

Of course I don't mind.:beer:

I agree that any unpaid tax liability up to the date of the Bankruptcy Order is in included in the bankruptcy, but I think the tax liability for the remainder of that tax year goes to the O.R and not HMRC. I've had a look in the Technical Manuals but can't find the relevant legislation.

I've got a link to it somewhere and if I come across it I'll post again. It doesn't make any difference to the O.P where the tax goes, the important thing is to make sure that it's available when its due to be paid.

Regards

Richard

debtinfo

yes it is in there somewhere saying that if you carry on in self employment you will get a NTcode. However except with leave of the court everyone who is self employed finishes their business on the day before bankruptcy and strts a new business the day after. like with PAYE if you start a new job/business then you return to a normal tax code. In my experience when i was an examiner no self employed person ever had their tax collected by the OR