Query about Nil tax code and related issues.

cinnabar

I'm not sure you'll get a nil tax code IPA - if you had been employed at the time of going bankrupt you would have been given one based on the liability for tax before BR, but as tigerfeet said, if you change jobs your tax code goes back to normal, because the liability for tax on the new job is a post-BR debt (at least that's my understanding). Since any employment you start now will leave you with a post-BR tax liability, I wouldn't have thought they can do the nil tax code thing.

I could be wrong about this though, can anyone clarify?

Oh, and don't forget the tax year ends April 5th, not March 31st!

tigerfeet2006

Some light reading here
http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch73-84/Chapter77/part2/Part2.htm

In cases where it has not been possible to agree an IPA to recover the extra income arising from application of the NT code, and the bankruptcy order was made between 6 April and the end of November, there should be sufficient time to obtain an NT code IPO. If the IPO is based only on the NT tax coding, in cases where the order is made after the end of November, the official receiver should assess whether it is worth making the application to court. The decision should be based on the following:
the amount of tax the bankrupt pays each month;
the time the local HMRC office takes to implement the NT code;
the time it takes to process an IPO in the local court;
the cost of making the application, such as the court fee, and the potential benefit to the estate.
The official receiver may consider it is worth continuing with the IPO application if the bankrupt pays a large amount of tax each month, even if only for one or two months of payments. It is anticipated that in the majority of cases however, the resources used in obtaining an IPO and the likely surplus available for collection will make it unrealistic to obtain a court order for a short period.
If the official receiver is replaced as trustee by an insolvency practitioner before the bankrupt’s tax code is adjusted, it will be a matter for the insolvency practitioner trustee to take the matter forward with regard to obtaining an IPA/IPO to recover the surplus income arising as a result of the application of the NT code. Where a tax refund arises due to delays in adjusting the bankrupt’s tax code, the tax refund should be claimed by using the bankrupt’s duly completed Income Tax and National Insurance disclosure authority form TNIDIS, which authorises the payment to the official receiver/trustee of income tax refunds payable for any year up to and including the tax year in which the bankruptcy order was made. If the bankrupt fails to agree an IPA/give consent the trustee may still recover the tax refund by applying for an IPO (stating clearly in the IPO application what is being claimed) as long as the application is instituted prior to the date of discharge

Extract taken from here http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter31/part7/part7/part_7.htm

And Cinnebar yes you are right on the dates again my bad

Praxis99

Thank you Tigerfeet and Cinnabar for these recent posts, it would seem from the info provided that I will be unlikely to get a Nil tax code so long as going from unemployed to employed status is seen as a change of income in the same vein at if I had changed jobs during the time of my BR.

It would also seem that any rebate due will be offered direct to the OR, this of course is fair enough and had I been working as normal I wouldn't have been due one anyway.

So my questions answered unless anyone feels they have anything more to add from knowledge or personal experience of the same. Otherwise thanks all for responding to my post.