BR 2009, AD 2010, No repayments, Tax Rebate??

kutiez2005

Hi wonder if anyone can help with this one

My husband & I were made BR in 2009
We were AD in 2010
Neither of us had any repayments to make as our income was too low due to ill health.
We have now discovered that we both overpaid income tax for the year 2009-2010. My own overpayment is £80 and my husbands is £430

My question is, now that our case is closed at the official receivers what is likely to happen to this potential rebate. Will it be written off, given to the receivers anyway or paid to us?

Money is so tight at the moment I am really hoping that it can be paid to us but expecting one of the other options tbh.

Tupperware_Queen

I received a refund from the tax man, and had to give it all to the OR. Sorry, I know thats not what you want to hear.

edited to add...refund came several months after early discharge, but as it related to the tax year in which I became BR, it had to go :-(

tigerfeet2006

Unfortunately as it was from your BR year it will go to the OR as an asset in BR. They will probably send it straight to them and you won't even get to see it. If you are sent it you MUST contact the OR and let them know. If you spend it then the OR asks for it you will have problems.

kutiez2005

I expected as much, we had a letter from HMRC to say that they were going to speak to the OR before sending it out to see if they wanted it but if they decline then it would come to us. It just made me think that there might be a possibility of the OR declining it as it was closed 2 years ago. It's a shame for us but of course it's right that they keep it... would almost rather have not had that letter :wall:

kutiez2005

Just an update if anyone wanted to know...

The OR declined my tax rebate but took hubbys so we did recieve the smaller of the cheques.

So if anyone thinks they might be due a small tax rebate it may well be worth claiming it.

PippaGirl_2

That's interesting. Thanks for letting us know and keeping us updated.

buzzmonkey

My case is the other way around. I have just received a letter from HMRC telling me I've underpaid tax by around £2500 for the year i was made BR. I has a NT tax code so believed this would be ok but clearly they have either 'forgotten' this or just want some money from me. I will be calling the tax people on Monday, but has anyone got any experience of this?

Heycock

Basically any tax event in the tax year containing the BR is included in the BR. That goes for any overpayment or refund(which becomes an asset for the OR), or happily for some of us anything OWING for that tax year. Your new financial life begins with a new tax reference running from the start of the next tax year. I wasn't aware of this when I went BR 2 days into a new financial year but apparently I got my timing just right for once in my life.

alastairq

buzzmonkey wrote: »

My case is the other way around. I have just received a letter from HMRC telling me I've underpaid tax by around £2500 for the year i was made BR. I has a NT tax code so believed this would be ok but clearly they have either 'forgotten' this or just want some money from me. I will be calling the tax people on Monday, but has anyone got any experience of this?

yes..this is...and has been....quite a common occurrence.

The issue [I believe.....any HMRC-lurkers feel free to contradict..which I hope for]...stems from when HMRC changed over to their 'new' computer system.


The new system has no way of knowing about the NT code, the BR, etc....and in my case, opened an entirely new file for me.....giving me two files with contrary information in them!

Contact HMRC by phone immediately.....otherwise the system will change your code to recover the amount.

The Advisers are aware of the problem, and should sort it out immediately.


You are not..[as above] liable for any income tax during the BR year..... unless...if PAYE, you change jobs during that year.


Get then to sort it toot sweet!

antonic

Sorry for the long post but this is from the HMRC website

PAYE13063 - Coding: coding: general principles: bankruptcy: details of a bankruptcy order are received (Action Guide)

When you receive details of a bankruptcy order in England, Wales or Northern Ireland, follow steps 1 - 21 below. This guide is presented as follows
Initial action in all casesSteps 1 - 5Update the recordSteps 6 - 9Action to take when debtor continues in the same job / pensionSteps 10 - 18Action to take when debtor starts work for a new employerSteps 19 - 20SA record requiredStep 21Initial action in all cases

1.Trace the PAYE Service / SA record, see PAYE120015 for guidance on trace and match2.View Contact History / SA notes Note: If the bankruptcy is being worked in another office, you should only request the bankruptcy papers from that office where full information is not available on the record. Make a clear Contact History / SA note of your actions; see PAYE105020 for guidance on Contact History notes.3.PAYE Service / SA - Review the name and address, update if necessary4.PAYE Service - Review for deceased indicator and address any correspondance with trustee accordingly5.PAYE Service - Remove the HR Indicator if necessaryTop of page
Update the record

6.PAYE Service - Set the ‘Inhibit automatic reconciliation’ indicator for the year of bankruptcy7.PAYE Service / SA - Set the ‘No repayment’ indicator8.PAYE Service - Review and remove ‘No allowances’ indicator where necessary9.PAYE Service - Review and reconcile pre bankruptcy years noting details of any underpayments PAYE93036 refers Note: Do not code any underpayments for pre bankruptcy years.Top of page
Action to take when debtor continues in the same job / pension

10.Amend the CY tax code to NT week 1 / month 1 and issue a P6 to the employer Note: Where employment is JSA / ESA / IB do not issue code NT, issue the existing code on a week 1 basis and make a Contact History note ‘EOY review required to complete bankruptcy process’.11.Consider CY+1 tax coding, if this is before Annual Coding you cannot change the CY+1 tax code. Work item 182 (PAYE13013) will be generated at annual coding to allow the CY+1 tax code to be reviewed If you are working the case after annual coding has taken place, trigger a CY+1 tax code and issue the tax code with the relevant allowances due12.Make a note of the bankruptcy order in the Individual indicators free text box (see PAYE103065) and Contact History. Use the general bankruptcy note on Office Clerical Assistant on SEES13.Advise the trustees that you have told the employer / pension provider to stop deducting tax14.Ask the employer / pension provider to tell you

• The total pay / pension and tax deducted from 6 April to the day before the bankruptcy order

• The net tax deducted or refunded from the day of the bankruptcy order to the date code NT WK1 was operated. Remember, do not tell the employer / pension provider that the employee / pensioner is bankrupt

15.Check to see if TNIDIS or other authority to repay / contact trustee is held, if not request this Note: Make a note in Contact History of when you write to the employer / pension provider for the relevant details and or trustee for relevant details / TNIDIS. Repayments up to the date of bankruptcy must be set off against any pre-bankruptcy debts owed to HM Revenue and Customs by the bankrupt individual. Any balance remaining following such set off must be repaid to the Official Receiver or trustee in charge of the bankruptcy. Further guidance on repayments and set offs is given in the Insolvency Manual (INS) at INS9307.16.Use the employer's / pension provider's figure for the period up to the date of the order to work out the amount for which HMRC will lodge proof only where the Insolvency Claims Handling Unit requests this17.PAYE only any repayment due to late operation of code NT should be issued using a manual payable order in accordance with INS9307. The Payable Order Control Officer should enter the manual payable order details onto NPS record18.Live SA any repayment due to late operation of code NT should be issued from the SA record as a freestanding credit in accordance with INS9307. This must bedone before entering any pre bankruptcy debts onto the SA recordTop of page
Action to take when debtor starts work for a new employer

19.If the debtor starts work with a new employer after the old employer has received code NT, this will be shown on the form P45

• In Code details change the code again

• Give the correct allowances due and use week 1 / month 1 basis

• Do not code out any underpayment which arose before the date of the bankruptcy order as this will be included in the proof of debt

Make a Contact History note ‘EOY review required to complete bankruptcy process’ Coding year that follows year of bankruptcy order

20.Code the employee or occupational pensioner in the usual way

• Do not code out any underpayment which arose before the date of the bankruptcy order as this will be included in the proof of debt

Note: NPS is unable to deal with the year of bankruptcy for PAYE cases where the year is split between the pre and post bankruptcy period and there is tax liability from the date of bankruptcy not attributed to operation of Code NT.
Where a record has already been set up in SA to deal with the bankruptcy year or SA criteria is fulfilled, the case will remain in SA.
When notification of bankruptcy is received the only cases which should be set up in SA for the year of bankruptcy are where

• There is SA criteria

And / or

• There is additional tax liability not attributed to the operation of code NT for the post bankruptcy period to the end of the tax year of bankruptcy

The year of bankruptcy for these cases should be dealt with on NPS by setting the year to ‘Reconciled - SA’.
For cases which need to be set up in SA follow guidance below.
Top of page
SA record required

21.Take action as directed by SAM106033 steps 14 - 19 to set up an SA record for the year of bankruptcy Note: Remember to set the insolvency signal and update the SA record with the BY information in accordance with SAM106033.

http://www.hmrc.gov.uk/manuals/pommanual/PAYE13063.htm

buzzmonkey

That is brilliant info and very helpful, thank you. I have called HMRC today and I should be expecting a call within the next 3 weeks to let me know of the outcome. The person sounded hopeful that because my BR was all in one year, I was discharged in the same tax year that i was made BR the debt should be written off. Fingers crossed