Income Tax IPA

Bluecar2

I was declared Bankrupt in August 2019, I had a letter in Febuary asking me to sign an agreement for £96 a month for 36 months and £137 a month income tax from august to April, I got in touch with the OR as my income had dropped by £220 a month and told them i wouldn't be able to sign, since then i'v heard nothing, do they have to have the Tax IPA in place before the end of the tax year or can they do it anytime up to my discharge date?

mwarby

I think it would be before discharge date. I'd think they have determined that the amount of IPA they could claim is £0 or so close to it to not be worth persuing. I'd also hazard a guess that the covid pandemic may mean that nothing happens(there will be a backlog for the OR)

I would try and avoid spending the extra income tax if possible, just in case they do expect you to be able to pay it over. I'm not sure theres much they can do if you spend it, it may come down to what was said at each interaction(eg if they said they would do an IPA for tax only, or if you were warned that the income tax would need to be collected regardless etc)

Minkym00

An income tax IPA can only be set up in the tax year in which you went bankrupt. Seeing as that is days away it can’t happen now. Sounds like they have let you keep it to make up for your loss of income. 

Bluecar2

Ok thanks for the info, I looked everywhere and couldnt find it, I still have all the tax money saved and will try and keep it that way till discharge just to be sure