Paying Income Tax in year of BR?
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TABC
Posts: 2 Newbie
I was bankrupt from Feb 2011 until discharged Feb 2012 but I was advised I still had to pay income tax on that tax year 11/12 - from self employed earnings, which I did, directly with HMRC. I have been paying this back monthly - last month is this month. However, my partner is an un-discharged bankrupt (May 2012) and he received a letter from HMRC this week saying they were writing off his owed tax from 11/12 and he would be exempt from paying tax in 2012/13 tax year. He would receive a new code for 2014. He is self employed.
Should I have paid tax on my un -discharged bankruptcy year? If not, should I challenge HMRC on this for a refund (it was £1500 tax bill) or will this cause problems with the OR? Perhaps it is best just to leave well alone and draw a line under the while experience?
Should I have paid tax on my un -discharged bankruptcy year? If not, should I challenge HMRC on this for a refund (it was £1500 tax bill) or will this cause problems with the OR? Perhaps it is best just to leave well alone and draw a line under the while experience?
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Comments
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You are ignoring the basic fact that the bankruptcies occurred in different tax years - it is the year you were made bankrupt that matters.
You were bankrupt in 2010/11 so you would pay tax as normal for 2011/12 and every year thereafter.
Partner was bankrupt in 2012/13 so will pay normal tax from 2013/14 (which is the tax year we are now in).0 -
Thank you. I didn't think I would have been advised wrongly by my accountant but the wording of the HMRC letter received by my partner suggested otherwise. I have read it back with your comment in mine and it now makes perfect sense. I think I got a bit over excited at the possibility of a refund! Good news is that this is my last payment so I'll be a much better off next month. Thanks Again.0
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