IPA confusion

leftatthelights

Hi all,

I have recieved a letter from my OR today stating that I will be required to submit to an IPA.
It says that I will have a NIL tax code and will be required to pay any tax I wouldve payed, to the OR until the end of this tax year.
Im fine with this but what concerns me is that sounds incredibly similar to an IPO!!
Is this the case??
My surplus income is around £30 a month so Im at a loss as to what is actually happening at the moment??
Can anyone shed any light on this and is it normal??

Paragraph 7 of the letter states "I acknowledge that my obligation to make payments under this agreement does not end when I am discharged from bankruptcy and that failure to make payments can effect the date upon which I am discharged".

Im very confused as this sounds like a 3 year IPO to me!!

HELP!!

fermi

An NT code based IPA runs until your tax code returns to normal. Often at the end of the tax year.

So an NT IPA will often run past your discharge date.

The full 36 month IPA must by law state the period it runs for, so unless it states the full 3 years then this isn't it.

leftatthelights

Thanks Fermi,

Here is a small snippet from paragraph 1- "The first contribution will be made in the month in which the Inland Revenue applies the NT coding and will continue until the the end of the current tax year."

As a side note, I was declared BR on 19th August '09 which means that I will have been BR for almost 10 months when the NT coding will be removed.

Is it a possibilty that I will be discharged after April or maybe get ED but still have to pay until April?

Oh, and it doesnt state anywhere, 36 months.

fermi

leftatthelights wrote: »

Is it a possibilty that I will be discharged after April or maybe get ED but still have to pay until April?

If the NT code is applied, then you will have to pay any extra tax due from that in your wages until it ends.

It should end in April at the latest.

The "income surplus" based IPA which runs for 36 months would be in a separate agreement, which it sounds like you don't have. Obviously if you start earning a lot before you are discharged you may get one of those, but you would have the extra income to pay it.

fiveyearplan

You will pay the NT code until end of tax year or if you change your job even if you get early discharge.

leftatthelights

Thankyou very much Fermi and FYP,

You have eased my mind somewhat!!
I came home from work and opened the letter and the first words I saw were "IPA" and my heart sank!!!

So basically, regardless of ED, I still pay until April.
Thats absolutely fine by me and its a great outcome after years of stress and uncertainty!!
I definately havent got the "surplus income" based IPA! I struggle as it is and having a few pints after work on a friday is an absolute luxury when its possible!!
Sad huh!!
The way I see it though, Theres always somebody worse off than yourself!!

Great news guys!!

Angiepange

leftatthelights wrote: »

Hi all,

I have recieved a letter from my OR today stating that I will be required to submit to an IPA.
It says that I will have a NIL tax code and will be required to pay any tax I wouldve payed, to the OR until the end of this tax year.
Im fine with this but what concerns me is that sounds incredibly similar to an IPO!!
Is this the case??
My surplus income is around £30 a month so Im at a loss as to what is actually happening at the moment??
Can anyone shed any light on this and is it normal??

Paragraph 7 of the letter states "I acknowledge that my obligation to make payments under this agreement does not end when I am discharged from bankruptcy and that failure to make payments can effect the date upon which I am discharged".

Im very confused as this sounds like a 3 year IPO to me!!

HELP!!

Hi Leftatthelights

We went BR same day as you and my DH received exactly the same form as you last week. He had been told in our interview he would be getting a nil tax code to the end of the tax year and how much it would be for.

I have to admit my reaction on opening it was exactly the same as yours and although we had no surplus thought it meant a 3yr IPA too!! I dont know, its just all the official paperwork still makes my heart sink I must have read it about 5 times and it definitely only refers to nil tax code IPA so panic over !!

Hope everything is going well for you, I was suprised to see you only got your interview recently as ours was beginning of Sept, that must have been a stressful wait but glad it all went ok for you.

Angie x

leftatthelights

Hi Angie,

Wow, same day huh??
To be honest the wait was excruciating!! I kept ringing all the time to see if everything was ok!! Im sure they had had enough of hearing from me after a few calls!!
The phone interview was very nerve wracking for me, didnt like it at all!
I did the same as you, kept re-reading the forms then I rang my mam (dont know why? must be a son's instinct to run to mummy when I dont understand something):o:D
Everything is going well now I know exactly what all the paperwork means and to know where I stand in the scheme of things.

Looking forward to the future now that things are starting to settle down!!

Hope you are also doing ok and are happy with the outcome (if thats the right word to use)?