BR & tax?

hunt85

I had my OR interview on the phone on wednesday and got through it ok, he reckons I paid off all my cards etc with a loan in July 2009 and then "racked up" (his words, not mine) £12k of debt on them since then? i don't think thats right but i just kept saying i'm not sure without looking at statements whether thats correct or not and he seemed to accept that as an answer! I'll end up paying about £14 per month to Moonbeever for the next 3 years but thats ok by me!

anyway my real query is this tax thing they do. He said they give me a nil tax code as to continue to pay HMRC each month through tax would be "favouring a creditor" so that bit i understand. My average tax amount each month on my last 6 months payslips was £165 so thats what they're taking between now and the end of the tax year. But i'm a bit concerned as I earn different amounts every month due to overtime so i'm not sure how this will work out later with the tax man etc? anyone been through this? i'm employed full time with a bank so not self employed or anything complicated!

thanks

BB&B

”NT” tax code Income Payments Agreements and Income Payment Orders

When a bankruptcy order is made against an individual who is subject to PAYE, HM Revenue and Customs (HMRC) applies a “nil tax” code to that person for the remainder of the tax year in which they were declared bankrupt and can then claim in the bankruptcy for the amount of tax which would have been collected (plus any other money owed for previous years), as long as the debtor does not change his/her source of income (i.e. gets a new job) during the tax year in which the bankruptcy order was made.

Where the new tax code is expected to be applied before the end of the tax year an IPA/IPO should be obtained. Where the bankrupt has signed the Tax and NI Disclosure Authority, an Income Payments Agreement (IPA) should be sought in preference to an Income Payments Order (IPO), to claim the extra money that the debtor receives.

An IPA/IPO can be made purely on NT tax code grounds and is not dependent on whether the debtor has any disposable income to make regular payments.

Once the NT Code is in place the bankrupt will NOT pay any income tax to HMRC and will receive gross pay, and the AVERAGED difference between net pay and gross pay will paid each month to the OR (Normally vio Moonbeaver)

Hope that makes sense

Tim