From bad to worse :(

Clouds88

I did try to post this a min ago but can’t see it so apologies if duplicate...


I am bankrupt and have no IPA as previously mentioned I am going on a nil tax
Code and going to pay this to or OR. However, Husband has just lost his job, so we’ve put a claim in for universal credits to top us up whilst he looks for more work. However, because of my nil tax code they said we will get less because my income will appear higher (even though i will not benefit from this) and they can’t do anything except try to appeal once I get my first payment. But it’s unliekly to make a difference

I’ve rang my OR but he’s not available until tomorrow but if he says tough luck then I’ll be in more poverty than when I got myself into debt (just without my previous debts) surely this can’t be right?!

What a mess

debt_doctor

Hi,

You need to inform your OR that you need that NT tax code money for your reasonable domestic needs as it is being used to reduce a means tested benefit.

Technical manual:

31.7.68 Reasonable domestic needs must be considered with regard to NT income

In all cases, the requirements of Section 310(2) [note 6] must still be taken into account when considering whether an IPA is viable to cover the period of the NT tax coding, to ensure that the bankrupt and his/her family are left with sufficient funds for their reasonable domestic needs. It may be that in some circumstances it will not be appropriate to require the bankrupt to consent to an IPA to collect the additional income resulting from the NT coding, if the bankrupt can demonstrate that this would cause him/her to experience financial hardship as he/she will not have sufficient income to meet the reasonable domestic needs of him/her and his/her family even including this income. The IPA which includes the surplus income arising as a result of HMRC applying the NT coding, should be drafted such that when this surplus income is no longer received (either where the bankrupt!!!8217;s income source changes or at the end of the tax year, see paragraph 31.7.65) the monthly amount payable under the IPA is reduced accordingly. The IPA should state that the NT income will only be collected under the agreement for the period during which the NT coding has effect.

DD

Clouds88

Thank you so much debt doctor, he is suppose to be calling me back today so hopefully we will be able to get it sorted then. Why can!!!8217;t they just make an agreement with hmrc then they still get their money that way!

National_Debtline

Hi Clouds88


I can understand your frustration here but there's no need to panic. As debt doctor has quoted, the OR still has to consider if an IPA is affordable, even if you are on a nil tax code. They'll take into account your husband has lost his job and will not be contributing the same amount towards the household bills.


Talk it through with your OR and let us know how you got on.


Best wishes


Susie
@natdebtline