Bankruptcy and tax liability

Heycock

Hi. Giving up work in October to be wife's carer and I don't want any nasty tax surprises coming when I can least afford it. Can anyone confirm that I am only due to pay tax on earnings included under the new UTR I was given at the start of the tax year (April 2011) following my BR date?

It just seems too good to be true. My accounting year goes December to December. I went BR 8th April 2010 but continued trading. I've been led to believe that everything in the 2010/2011 return (earnings Dec 2009 to Dec 2010) are included in the bankruptcy. That would mean nearly nine months of earnings post BR not being taxed! See what I mean about too good to be true.

Can I safely forget about this? I did get a letter confirming a new UTR and it mentioned liabilities in the tax year of BR but I no longer have it to refer to. (Papers disappear along with other stuff in our house...that's why I need to concentrate on caring!)

debtinfo

You really should be paying you tax from after you bankruptcy date to someone be that the OR or HMRC

Heycock

Well I'd have thought that myself and I've been keeping the money to one side in case, but looking at much older posts going way back, it looks like everything under the old UTR goes into the bankruptcy and liability stars afresh on the new UTR which only starts at the beginning of the tax year following BR. My interpretation now after going on a few other tax advice websites is that I did myself a big favour by going BR just as a tax year had started.

It would help if HMRC could make this clear in their guidance notes. After all it's not an unusual situation.

As ever with our government agencies, they make it clear as mud.

At least I've put the money to one side and I'm up to date with my returns on the old UTR. I can do no more. If their arcane rules work in my favour, well I'm not going to complain! They still don't want a return on the new UTR for 2011/2012 but I'm doing one anyway 'cos I don't want to be caught out unawares.

System

I had exactly the same thing. Went BR Dec '11, all tax liability for the 11-12 tax year is included in the BR. I had a letter from the HMRC saying this. The 11-12 tax return had to be done on paper (not online) and definitely had to be done, even though nothing would be payable.