BR and tax returns

Legacy_user

Had a letter in today from HMRC saying... (paraphrased)...

"We understand you were made bankrupt....

We wil linclude any amounts you owe us up to and including the year 5 April 2012 in the bankruptcy claim held under Self Assessment number blah blah blah"

SO, does this mean I don't pay tax on anything I earn through the business until 6th April 2012?

Sounds too good to be true. Nothing was mentioned about tax payments in my OR meeting earlier this week.

IF

Hi MUM, A nil tax code is when you pay the money you would ordinarily pay to tax, to the OR via a company called Moonbeaver. It lasts until the end of the tax year or you get a new job.

Fermi's thread explains it better than I can.

Fermi’s thread explaining Nil Tax Code

Another helpful thread - Click here

Best wishes
If...x

System

Thanks, I've read this before. Interesting that nobody has officially told me this will be happening though or even made any mention of it.

debtinfo

are you self employed

System

Yes, self employed here

debtinfo

messedupmoney wrote: »

SO, does this mean I don't pay tax on anything I earn through the business until 6th April 2012?

Then you do have to pay tax and you wont have a nil tax code,

confused?

basically they treat your prebankruptcy S/E as the old business and you dont have to pay any tax for any previous year or this year (ie until april 2012) as this is covered by the bankruptcy

BUT

From the bankruptcy date onwards, you officially have a new business (you will need to get a new UTR number) and you will pay tax on this and so you need to be putting this money aside now

IF

Sorry MUM and DI, didn't read post correctly re self employed.....many apologies me bad :o

System

That would make sense and I know it's how others have been dealt with, however the letter doesn't state that. I'll type the whole thing out:

"I understand you were made bankrupt on DATE at BLAHBLAH County Cort.

We will include any amounts you owe us up to and including the year to 5 April 2012 in the bankruptcy claim held under Self Assessment reference number NNNNNNN.

Shortly after 5 April 2012 we will send you a paper tax return for the year 2011-12. You must declare your full income for the year of bankruptcy in this return. You should send the completed tax return form to us by 31 October 2012.

You must complete the paper return manually. You cannot send this return online to us because it is for the year of bankruptcy.

From 6 April 2012 you will need a new Self Assessment reference number. Your new numbers will be NNNNNNN

The first tax return you receive which uses this new reference number will be for the tax year 2012-13. We will deal with tax years up to the year you were declared bankrupt under your old Self Assessment reference number. We will send all future tax reutrns using the new reference number."

It then goes on about registering again for online services etc.

Now, to me this means that any tax liability I have upto and including 5 April 2012 falls into the bankruptcy. From 6 April onwards, I'm liable again. No?

lynnellen

glad you put this post on , my OH has exactly the same letter and i thought we just carried on the same as normal, i sent a copy to our accountant as well. all these new tax codes sound like a recipe for disaster for us as part of our bankruptcy was due to HMRC cockups with tax utr's.

debtinfo

hmmm thats interesting as that is not how they have done it in the past, maybe they have changed their mind as they always used to treat SE people as starting a new business and therefore liable for tax again

debtinfo

of course though you never win because if HMRC decide you are not paying tax for this period then you would need to declare the higher than expected take home income to the OR