Nil tax code

debt_doctor

There are several factors that decide whether any NT tax code will be applied during the bankruptcy period (up to the end of the tax year). Bankrupts who time their bankruptcy's carefully can and do avoid NT tax codes - but if the created tax refund turns up whilst undischarged, the money will be claimed.


Technical Manual;


In deciding whether an IPA is appropriate in order to collect surplus NT income, consideration should be given to the amount of tax the bankrupt pays each month and the time the local tax office is likely to take to implement the NT coding. In practice, it can take some time to implement the NT code and the bankrupt will then receive the overpayment of tax as a refund at the end of the tax year. Where such a tax refund arises due to delays in adjusting the bankrupt's tax code, it should be claimed by using the bankrupt’s duly completed authority TNIDIS which authorises the payment to the official receiver/trustee of income tax refunds payable for the tax year in which the bankruptcy order was made. The tax refund must not be claimed as after-acquired property.


DD

debt_doctor

Yes, very good news......


http://www.moneysavingexpert.com/news/banking/2015/12/nine-banks-to-offer-fee-free-basic-accounts-in-the-new-year?_ga=1.251323777.646139144.1441957415


DD

Joemac2016

Ok I know of the banks giving basic accounts but will they give accounts to 'undischarged' bankrupts. It's not very clear yet if they will or is that the idea as of new legislation tomorrow. Also if you have debt with them, are they less likely to give you an account?

Regarding nil tax code, I have a good salary and pay a lot of tax each month. Are they more likely to apply code to me then for Feb and March. There would be a few grand to lift if they did. Starting to think it may be better to leave til end of March now

debt_doctor

It depends upon how quickly the Revenue get round to changing your tax code - there is no financial incentive for the Revenue to hurry things along - and no need for the Insolvency Service to panic either as even if after the tax year end, the IS still have a method to re claim the money direct from HMRC.
In the experience of my clients, it takes 'a few months' to set up the NT tax code - but there are no guarantees. As you are suggesting to yourself, the less time between going bankrupt and the end of the tax year, the least likely an NT tax code could be achieved.
On your other point, the new basic bank accounts are designed for those suffering financial difficulty. A law has been changed whereby it was (at least theoretically possible) that a bank could be held responsible for funds 'leaving' a bank account in bankruptcy that could have been the property of the Trustee. Allegedly it was this that made most banks adverse to bankrupts having accounts with them.
DD

Joemac2016

So hopefully more banks will accept recent bankrupts going forward then? Another question, am I better to set up a basic account before or after bankruptcy? It would be great if I had one set up next month so I could get my salary and direct debits paid in in anticipation of declaring feb/March

Cobalt77

Joemac2016,

Always a good idea to get another account set up in advance anyway. Many of the new basic accounts can be set up online, so maybe have a go next week once the new accounts are live.

Plus, some banks will still pay "switching bonuses" if you move your current account to them - one chap on this forum who had already gone BR recently opened a Yorkshire basic account and received (I vaguely recall) around £150 once he moved a couple of regular direct debits over to it.

Joemac2016

My concern is that I open an account, then I go BR and then they close it on me, then I have to another bank account straight away. My employer might then be wondering why I have changed banks twice in 2 months and smell a rat.

As you can gather the less suspicion from my employer the better.

Not bothered who outside work knows about it, but really want to keep it private from work as its none of their business

Should I ask in the branch if they will close my account if I go BR?

luvchocolate

I would suggest you open a basic bank account that is BR friendly move your DD and wages in before declaring BR.
Its always best to take time to get everything sorted and not rush, the preparation ..as in a lot of things is the key.

elljay

Yes, I definitely agree about taking time to make sure you've covered everything, I sorted out a Co-op Cashminder account a good few months before going BR, so I could ensure all DDs, pay etc had the new details.

I went BR in the Sept, my IPA started in Dec but they never did get round to changing the tax code by the following April. Just depends how efficient everyone is.

My boss found out via google as previously mentioned - she was just checking my postcode for her own records, nothing else, and the Gazette entry was top of the list of results. Although nothing was in my contract, bit by bit the gossiping (she has no concept of confidentiality!!), being taken off various duties etc so that I ended with nearly no job at all, made life impossible so I left. To their relief!!! I was definitely made to feel like a criminal. I had to leave my other job, nothing again in the contract, but because I found out myself that the community organisation's insurance would be invalid if anyone working there was bankrupt. Luckily there's plenty more work out there for a multitasking portfolio worker like me!!!

Good luck with whatever you decide to do, but do get the bank account sorted, that's so important. I'd still be inclined to stick with the Co-op beforehand, to give yourself time to sort your dd's etc. Just until the new accounts are bedded in a bit. I found it takes a month or so to do as you have to do the dd's manually, the Cashminder account didn't provide an automatic changeover service as more 'regular' bank accounts do so I did them one by one.

EJ

TheGardener

So many people are 'switching' bank accounts at the moment I doubt anyone in payroll will think it is unusual - a payroll colleague where I work was moaning the other day about the amount of extra admin the 'switching' trend has caused them.
As for putting 2 and 2 together about an NT code - even if someone does work it out - they should be the subject of a grievance complaint if they discuss it with anyone.