Nil Tax Code

Steve_C_4

My wife and I are planning Bankruptcy (having received advice from the CAB).

We are currently saving up the two sets of fees.

Both our employers have told us out hours are likely to be cut back (and this may give us a remission on the court fees).

And it is possible that my wife may lose her job (she is not entitled to any redundancy).

We have been reading the brochure on IPA’s and Nil Tax Codes. And understand we may have to pay an IPA for 36 months if we have a surplus of income after our allowable living expenses.

And if we are both in work at the time of our Bankruptcy our tax will be due to the Official Receiver until the following April.

Do we pay this or is it collected from our salary?

Also if my wife is unemployed at the time of our Bankruptcy she won’t have to be any tax or an IPA.

But if she (as she would hope to) gets a new job during her Bankruptcy would she have to pay the tax to the OR?

We do realise she would also give details of her new salary and may also be asked for an IPA if there is a surplus of income.

It’s the tax situation that we are not sure about if she was unemployed at the time of her Bankruptcy and then gets a new job during her Bankruptcy.

I’m sure we will be told what happens by the OR it’s just that we would both like to know as much as possible in advance.

Because when we have our interviews we’ll be be very nervous and may forget to ask or not remember what we were told.

We don’t want to cause the OR any problems by not knowing, forgetting or understanding all the rules.

Thanks so much for your help.


Steve

JCS1

The NT tax code only applies to employment you are in on the date of your BR. So if unemployed and then gain employment, there would be no nil tax code.

Contracts_Engineer

as no tax will be taken it will be in your wage / wages. you then set up a standing order to pay that tax money to the relevant parties

Contracts_Engineer

any change of circumstance has to recorded. therefore if you get a pay rise or promotion or change jobs to a higher paid job then, if your new wage then meant you have surplus income then you will start having to make payments.
it also works the other way though so if you lose your job or your partner does or you lose your job and get a job on less money then your payments could decrease or cease completely