Nil Tax code IPA and regular IPA

b-man

hi all,

I am wondering if anyone can answer this question.

Is a Nil Tax Code IPA linked in anyway to a regular IPA?

the insolvency website says this -

There will be extra money in your pay because of the nil tax code. This money will form the basis of an IPA or IPO, even if you have no other real disposable income. 9 A nil tax (or NT) IPA or IPO may be the only amount you have to pay, and the agreement or order will stop when your tax code changes. If you have other real disposable income, the IPA or IPO will reduce when your tax code changes.

My understanding is that this mean that if you have no surplus other than your tax, that when the tax year ends you no longer pay an IPA.


however my question is this - if you then get a payrise in 6 months time, after discharge, and you were paying a Nil Tax IPA before, will you be liable to then pay the excess in a regular IPA after discharge has occured?

many thanks,

Bman

tigerfeet2006

No, th 2 IPA's are completly seperate. So if you got a payrise you would inform Moonbeaver who will then alter your NTcode to suit and this will only be to the end of the tax year (5th April) or until you change jobs. If the rise is only small then they may not evn bother.

b-man

so when you get an IPA do they specify if its just a NT IPA or a full one?

debtinfo

Yes you will see it written in the agreement that one is the result of the NT code and lasts until the end of the tax year, There is a seperate paragraph for the surplus IPA for 36 months

b-man

thanks - thats very helpful