NT Tax code and Universal Crediting classing it as additonal income

Hi all. Would much appreciate some guidance.

I went Bankrupt on 26th April.

In may I was placed onto a NT tax code.

Come end of June  our universal credit payment was literally about £10. As usually around 400.

I found out this is due to the fact they were classing the extra money from tax as additional income, even though i have to pay it back to insolvency service.

I filed a mandatory disclosure i think it is 

Numerous calls and about 30 messages later, with claim escalations being raised 3 times. We had  a response today stating they will continue to class it as additional income so we wont be entitled to any universal credit while on an NT tax code 

We have strugglee more than usual recently due to this.

I am about to go in for major surgery on my kidney in coming weeks, and the decision that they are still going to class it as additional income is worrying me sick.

Im a father of 3, and need to try and support my family , and balance work and ill health.

I spoken to the insolvency service who said to talk to HMRC and ask to be put back on my old tax code.

HMRC said the order came from Insolvency so they cant change it until my bankruptcy is up.

DWP say even though im paying the money back to the Insolvency, its still additional income so i should just go to food banks ( their words)

Ive filed for a reconsideration via tribunal but that could takes months and i worry its the same decision.

Its wrong, totally wrong. Its not additional income, im basically just paying my tax to the insolvency instead.

Please can anyone help.


  • luvchocolate
    luvchocolate Posts: 3,237
    First Anniversary Name Dropper First Post Home Insurance Hacker!
    There was exactly this on another thread...try to search and hopefully you'll find it 
  • stepha4
    stepha4 Posts: 33
    First Post First Anniversary
    We had exactly this last year. Let our OR know that our income had gone down by £700 because of the NT Tax Code and we didn’t pay it again till April when the tax code changed back.

    universal credit won’t do anything we found but the OR was helpful.
  • I have told my OR, and he said to contact hmrc, who then said they will change the tax code back but they will not send the tax money to the Insolvency service.

    I then relayed this to the OR, who went away and this is his reply.

    "I have consulted with a senior examiner who has instructed me to inform you that there is no mechanism for us to allow your tax code to return to normal whilst you are bankrupt. It is basically set out in law that HMRC will apply the nil tax code and therefore we must collect the surplus via an IPA. So nothing can be done.




    Lovely isnt it 

  • stepha4
    stepha4 Posts: 33
    First Post First Anniversary
    Ridiculous. Our tax code stayed at nil but as we lost Universal credit every month because of it. To balance that, our OR let us keep the amount we were losing each month and we just paid the excess!

Meet your Ambassadors


  • All Categories
  • 341.6K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.7K Work, Benefits & Business
  • 605.8K Mortgages, Homes & Bills
  • 172.4K Life & Family
  • 246.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards