IPA till end of current tax year.

Writer48

Hi,
I have been declared bankrupt.
IPA has been set up. 
I have NT code on my payslips and they asked me to pay only that amount monthly into IPA till end of tax year.
All understand but few questions:
After tax year will end I will no longer need pay anything? I am going to be discharged in July.
If my circumstances change for better before or after tax year ending they can extend my IPA even up to 3 years?
Im trying to develop my self in a few areas at work and can get small salary rise but I'm afraid I will pay for that over 3 years period. I hope you understand. I don't mind paying I just would love to have all this already behind me...not to think about that for next few years.
Thanks in advance

bradders1983

An IPA is for 3 years (36 months), the fact your bankruptcy is discharged in July is irrelevant. You are supposed to tell them at any point in that 3 years if your salary/circumstances changes so they can reassess it (I will be honest, I got small cost of living increases and I never bothered telling them, I will leave this up to you).  The NT tax code will revert back to normal in the 2021/22 tax year and from April 2021 onwards you just have to pay them the agreed IPA amount.

I dont understand this bit though:

"I have NT code on my payslips and they asked me to pay only that amount monthly into IPA till end of tax year."

I was asked to pay the tax AND the IPA amount to them until the March, not either/or. I think you need to check this, cant imagine it has changed since 2013. It is possible you may have worded this badly.

flipflopflo

There are 2 types of IPA's 
1) A nil tax code IPA where you pay your tax to the OR in the tax year you go bankrupt. This finishes in the April of the BR tax year and you go back to the normal method of paying this in the April and that's it done and dusted.

2) A surplus income IPA. This can be set up anytime during the BR year if you have a change in circumstances. If one is not set up before you are discharged then you won't be able to be given an IPA, that's it done and dusted! If your circumstances change and you have a surplus of income over £20 then the OR will set up a surplus income IPA which lasts 36 months and can be altered up, down or suspended if your circumstances change.

Hope that helps you understand better what is going on.

bradders1983

Thats odd. I had a mix of both when it happened to me. 36 months and was also put on a BR tax code for the first 3 or so months.

flipflopflo

bradders1983 said:

Thats odd. I had a mix of both when it happened to me. 36 months and was also put on a BR tax code for the first 3 or so months.

Yes, because you had both a nil tax code IPA and a surplus income IPA. Some people get both because they have to pay their tax and have surplus income. Some only pay the tax one as they have no surplus income. Some only pay the surplus income because there is not enough time to set up the nil tax code before the end of the tax year.

bradders1983

Fair enough. Assuming the OP has the BR tax code only one he may want to wait until July to get that promotion.

Writer48

Thanks all for reply. Yes I have to pay only amount from tax as I don't have much left from salary. As I said I was just wondering if they would change it and add any surplus If I will have my circumstances change and then extend that for 3 years. 

bradders1983

If you tell them you are earning more before July then yes, seems they can. Do with this info as you see fit.