OR and HM Revenue

bewildered1

I was recently talking to someone about my impending bankruptcy. They were recently made bankrupt themselves and I was asking him how he felt about it all.

He did bring something up that I questioned. He said that since being made bankrupt he has gotten himself a part time job to go alongside his full time role. His wages go through the books but he gets paid in cash (It's bar work so not unusual) but nothing goes into his bank account. I don't know if it's taxed. He said he hasn't told the OR about this extra income. He said it's just money to pay for things for his kids.

He hasn't been given an IPA, so far. He has a Nil Tax code though on his full time job.

I told him I thought it was an offence not to inform the OR of this extra income but he said they won't find out.

I would presume that as nothing goes into his bank account the only way the OR could find out about it is if they go to HM Revenue and check the amount of tax he pays. Is this something that happens or has he found a loophole?

maxmycardagain

Ive just tried to register an employee part time and no-one wants to know so hey ho...

PaulL2

It's not unusual to be paid in cash but have a payslip and indeed the tax goes to HMRC - probably at 40% ouch! - so if government departments have the time to talk to each other (as if) he could be in trouble...

bewildered1

I asked him a bit more about this because I thought that if you got a new job during your bankruptcy period the Nil tax code reverts to normal tax. (Please correct me if I'm wrong) so I asked him what happens with the tax he pays.

He said he did some work for the bar before he was made redundant and was never taken off the books when he stopped working there so officially has continued to be employed by them. He's recently started to work a few hours here and there on a casual basis. He said he's on a Nil tax code with them too but he's not sending in the money he'd normally pay in tax. I asked him why and he said because he wasn't doing any hours at the time of going bankrupt and didn't think to mention it to the OR and because he's not on set hours, he only works the occasional weekend to cover holidays or sickness and he doesn't earn a lot anyway.

He's hoping that the OR won't look into it but I can't believe periodic checks aren't made to stop things like this happening but looking at a few posts here I suppose the OR's are overworked as it is.

National_Debtline

Hi there,

The reality is that your friend should be informing the OR of this additional income and it is an offence not to. If the income is minimal/ inconsistent, they may not have an IPA anyway, but by withholding information the OR may apply to suspend his discharge from bankruptcy.


He should also be paying tax, and if that isn't being done correctly the HMRC could pursue this as it is a debt that has built up, after the bankruptcy, so cannot be included. It can be a hard time, and restrictive, but if they are not abiding by the correct process, there can be further consequences.


Laura
@natdebtline

maxmycardagain

He's hoping that the OR won't look into it but I can't believe periodic checks aren't made to stop things like this happening but looking at a few posts here I suppose the OR's are overworked as it is.

well theyve had £700+ per BR so its not like they do it for free

bewildered1

maxmycardagain wrote: »

well theyve had £700+ per BR so its not like they do it for free

There is that. Maybe he's just been lucky. So far.

I have sleepless nights worrying about my debts as it is. I'm not sure my nerves could cope with worrying if I was going to get caught out if I was doing what he is.