NT tax code question

unsure100

Please could the more knowledgeable people answer a question?

I dont want my company finding out about my impending BR from an embarrassment point of view, having to explain things and also because its only a new role.

How long does it take for the OR to inform the inland revenue who then inform your employer?

I am thinking of going BR at the end of Feb, is that far enough into the tax year that they wouldn't bother?

Sorry if it sounds like a strange question.

Thanks

SteveABC

Hi there

I'm not an expert, but can share with you what I know:

1. The Inland Revenue are simply asked to apply a nil tax code. I don't believe they say it's due to BR, as there are several reasons why a person may have a nil tax code.

2. I went BR 30th March, so obviously the nil tax code didn't apply as it was so close to the end of the tax year and I never had one applied to me.

If it is causing you concern, could you go BR say mid-March onwards? I'm sure there wouldn't be time to apply the nil tax code.

Good luck and best wishes.

sniggings

took a good few months for my nil tax code to show up.

Maizy

Two weeks after BR and my OH tax code was nil and the money needs putting aside to pay each month. As far as Im aware the employer wouldn't know what the nil code is for, they could speculate I suppose but like any HR department, it really isn't something they can discuss or really have a need to. Suppose it depends on the size of the company involved as to whether you would feel uncomfortable or not. Its a shame to put BR off for that reason as the sooner you go BR the better if that is what you need to do. Good luck. Edit: just checked again and it was actually 3 wages after BR it showed sorry.

alastairq

hi..as SteveABC says.........the Nil TAx code is simply applied by HMRC...as soon as they are notified of BR.[The year's tax is included in a BR, NT coding being applied to keep PAYE in line with self-assessment folks.]

It may well be that individuals within a company's pay department, or HR, will speculate as to why the NT code is applied...but they would be subject to severe disciplinary action should they ever breach confidences....

I'm willing to bet, however, that only those individuals with a direct knowledge of bankruptcy will make the link, such is the general public's ignorance surrounding BR?

System

I'm self-employed so it may be different, but I recently had a letter saying that all of my tax liability for the 2011-2012 tax year (ie upto April 5 2012) was being included in the bankruptcy. No nil tax code (that I've been informed of) and seemingly, no tax to pay on any earnings either.

alastairq

messedupmoney wrote: »

I'm self-employed so it may be different, but I recently had a letter saying that all of my tax liability for the 2011-2012 tax year (ie upto April 5 2012) was being included in the bankruptcy. No nil tax code (that I've been informed of) and seemingly, no tax to pay on any earnings either.

as I said above..the NT code applies to those who pay tax via PAYE.....this brings them into line with folk such as yourself, who have their tax [liability] included in the BR....prevents accusations of discrimination by HMRC.....

Income tax being a debt that can be included, etc...Everyone technically receives a tax 'bill' at the start if the tax year....PAYE means people can pay it bit by bit over the year..

however...for those on PAYE, if one's job changes within the NT period, one's tax code reverts back to normal....and the NT IPA ceases.

This is payable as an IPA because the BR effectively receives gross pay [less other deductions]...so therefore has a 'surplus'...

unsure100

I think it will be last week of feb/first week in march.

That way I can get paid salary, and withdraw enough for fees and have the rest to live on for the month.

My wages will be completely different one month from now and going forward.

Does that mean that they wont take an average for say the last 6 months?

Is that close enough to the end of the year?

BoGoF

Even if they don't issue a NT code in time they will still write to the employer requesting pay and tax details for the pre and post bankruptcy period - again they won'y mention bankruptcy but there is going to be some form of contact with your employer.

unsure100

I didnt think they contact your employer?

BoGoF

If the NT tax code isn't operated the tax deducted from the period of bankruptcy is still repayable to the OR. So HMRC will write to your employer for these details. As I said no mention will be made of bankruptcy but if you were hoping your employer would not be contacted in some way, sorry to disappoint.