Tax refund in IPA

Mrhuk

Hi,

Came home to a surprise cheque from HMRC for £250, it states "correspondence relating to this payment will be sent you separately" but I'm guessing it's a refund for last tax year, if that's the case then according to insolvency service I believe I'm allowed to keep this as I declared bankruptcy in February and IS says this

Tax refunds - bankruptcy
Any refund in respect of tax years after the tax year in which the bankruptcy order was made may be claimed by means of an income payments agreement/income payments order (IPA/IPO) where the bankrupt remains undischarged. The IPA/IPO application should clearly state what is being claimed.

Am I right in thinking that if this is for last tax year or before then I am ok keep this ?

Thanks

Minkym00

When you are bankrupted HMRC change your tax code to nil and what you would have paid in tax is claimed by the OR until the end of the current tax year (or until you change your job if you do that first). If HMRC hasn’t got your nil tax code in place by the end of March (which is likely seeing as your bankruptcy order was in Feb) then they just remit the tax you’ve paid to the OR instead.

HMRC shouldn’t have sent this rebate to you, but it does happen. The OR will very likely claim this from you so I wouldn’t spend it if I were you.

Mrhuk

Ah thank you for the reply,

The OR said they're not going to change tax code as it was too close to end of tax year.

I suppose it's just waiting for the correspondence to find out what it's for