Tax rebate after bankruptcy

T76

I received a letter from the tax mand 2 months ago advising me that I was due a tax rebate for 2008/9.

I have now received another letter telling me that this is not the case, as it will go to my bankruptcy.

Can anybody tell me if this is the case?

I was declared bankrupt in 7th July 2008 and discharged on 15th January 2009.

I was unemployed when I filled for bankruptcy, then had 1 weeks temporary employment, before becoming unemplyed again for a few months (In total I had 3 employment periods from 7th July to the end of the tax year).

The tax man has told me that my rebate will go to clear off my arrears, but how is this the case when my rebate did not become due until April 2009 and any arrears to the tax man should have been written off on 15th January 2009 - surley my rebate should have nothing to do with my bankruptcy - otherwise the tax man could just super tax every bankrupt to get as much money from them as possible?

Thnak you

fiveyearplan

Yes, tax rebates go to the OR. If it was due April 09 was it for a period during your bankruptcy? How much is it?

T76

yes, it was for the 2008/9 period (bankrupt July/08 to January 2009).Will it still go to the OR, even though I was not given an IPO?Thank you for your help.

serenity34_2

T76 wrote: »

yes, it was for the 2008/9 period (bankrupt July/08 to January 2009).Will it still go to the OR, even though I was not given an IPO?Thank you for your help.

Yes it will. There doesn't need to be an IPO/IPA in place. Tax rebates will be paid later ( in your case after discharge ) because of the way HMRC work. But you 'accrued' the rebate, so to speak, well before the date you actually received it.

The relevant bit from Insolvency Sefvice technical manual is pasted below. If the rebate was for a tax year AFTER discharge then they would only be able to touch it if there was an IPO/IPA so that's probably why you're confused!

iii Tax refunds - bankruptcy
Tax refunds may be payable to a bankrupt for periods both before and after the making of the bankruptcy order. Refunds due for tax years prior to the date of the bankruptcy order and for the tax year in which the bankruptcy order was made can be claimed using the bankrupt’s duly completed Income Tax and National Insurance disclosure authority form TNIDIS.

T76

Thank you for your help - sorry if I appear greedy I just thought it was strange for the tax man to leave me short on what I should have been earning and what I budgeted, for and then they decided to take from me (this is the money I thought was coming back, and deliberatelty didn't try to rectify my tax code sooner for, as I belived it would hep me save).

By the looks of it I should have protested the extra taxing at the time and not have assumed it was good for me ( mt MOT and car tax is due next month and the budgeted money for it comes out of the extra tax I paid that I will now not nreceive).

Anyway, sorry to winge.

Thank you for you guidence.

Tori