Question re Tax and also re Buying Car

jmc2305

Hi. Have posted a couple of times before and thanks to all the helpful advice given.

Recently read something about a nil tax code? I didn't really understand it. My husband pays 40% tax - does this change and who gets the money? Also, he owes the taxman, through his past employer's rubbish paye mistake, about £3000. Would this be included in bankruptcy?
Re car - currently my car is hp in husband's name (£300 p/m which we have stopped paying today). My husband gets a small bonus in about 4 weeks and if we pay this to my sister can she buy a car in her name for me? Who then does the insurance go under? Any helpers please?

tigerfeet2006

jmc2305 wrote: »

Hi. Have posted a couple of times before and thanks to all the helpful advice given.

Recently read something about a nil tax code? I didn't really understand it. My husband pays 40% tax - does this change and who gets the money? I am assuming he is the one going BR. If so then HMRC instruct his payroll he has NT code. The amount then appears in his wages, he sets this aside and then gives it to the OR's trustee when asked for it. After the initial month a DD is usually set up and it comes out of your bank account each month. Also, he owes the taxman, through his past employer's rubbish paye mistake, about £3000. Would this be included in bankruptcy? Yep this gets included.
Re car - currently my car is hp in husband's name (£300 p/m which we have stopped paying today). My husband gets a small bonus in about 4 weeks and if we pay this to my sister can she buy a car in her name for me? No you can not give this to your sister. This will be seen as getting rid of assetts. Does your husband have a car? Is a car for you an absolute nescesity? (not a convienience.) He could buy you a little run around but you will have to prove it is essential to your household to be able to keep it. Will post link to info.Who then does the insurance go under? Any helpers please?

Hope some of that helps.

Here's the link. You will need to prepare a case why you need a car. Not being nosey but how much were you looking to spend on the car.

http://bankruptcy.informe.com/cars-and-bankruptcy-dt72.html

jmc2305

Thanks Tigerfeet - re car - my husband has a company car and leaves for work at 7.15 and back about 7.30. We live remotely - no bus, kids are 3, 6 and 8 and would not be able to walk to school. Nearest bus stop is 2 miles away. We were gonna spend about £1500. So what do we do with the bonus he is paid (probably about £2,000) and also we are due to get £800 Scottish & Newcastle shares next month. Plan to get BR appointment for end May.

jmc2305

Oh, and re the tax - brilliant help but being a thickie and unsure about all this do you mean the tax he should pay goes to creditors IN ADDITIOn to any surplus or because there won't be any surplus?

tigerfeet2006

jmc2305 wrote: »

Thanks Tigerfeet - re car - my husband has a company car and leaves for work at 7.15 and back about 7.30. We live remotely - no bus, kids are 3, 6 and 8 and would not be able to walk to school. Nearest bus stop is 2 miles away. We were gonna spend about £1500. So what do we do with the bonus he is paid (probably about £2,000) and also we are due to get £800 Scottish & Newcastle shares next month. Plan to get BR appointment for end May.

To be honest I would make the car as cheap as possible. They have taken cars for far less value than that. Will post a link to a thread for you in a minute. Here we go http://forums.moneysavingexpert.com/showthread.html?t=836865

Maybe look at £1k or below.

You keep the bonus etc. safe and declare it to the OR and he will probably want it.

tigerfeet2006

jmc2305 wrote: »

Oh, and re the tax - brilliant help but being a thickie and unsure about all this do you mean the tax he should pay goes to creditors IN ADDITIOn to any surplus or because there won't be any surplus?

You are not a thickie. There is a lot to take in and if you don't ask you don't know and no question is stupid.

The NT code is applied automatically and you get it whether you are paying an IPA or not.

Ask anything you want, we are here to help if we can.

PixiePie

Can I point out again though that I have a *really* nasty OR's case worker working on my case and trying to take my car, so even though you couldn't sell it for love nor money and the OR still wants to take it, that's a bit extreme I think (tigerfeet, stop scaring people with my extremely bad luck :P ) - but I would echo the 'cheap as possible' point....If you want to buy a dead Skoda for £10 just to annoy the OR, I can do you a good deal :rotfl:

The tax thing is rather confusing to me as well - in the end the Tax office got so confused that they didn't get around to applying it before now and therefore they shouldn't be applying it at all for me, however they think they have to apply it for next year now - it's from when you go BR until the end of the current Tax Year - if you are going BR in May, then that's pretty much the whole term (especially if you get ED! ) so a couple of admin problems with mine, but generally it's pretty straight forward - you get a bigger pay packet each month, but the extra you get you pay straight away to the company dealing with your Tax payments, who should be in contact with you soon after you go BR to let you know how much they are expecting, where and when they want it.

tigerfeet2006

Sorry Pixie . Just felt fore warned is fore armed. If they know things could be difficult then they have the chance to try and cover all bases when writing the letter to the OR as to why the car is really essntial and not just a convienience.

jmc2305

Thanks everyone - think i am clear on most of that - HOWEVER!!!! - again re the bonus - what do you mean, keep it safe and declare it and he will get it - what if it's just eaten up by everything else (eg the oil/elec bill which just came in of £1400 (in addition to the £180 per month!). Actually, that's rubbish, i am not clear on anything. Gonna start a new thread for those of you on line right now! (I notice tigerfeet posts at 11.30 pm - do you not sleep?)

PixiePie

Tiger: no worries for me, I just don't want to scare people lol

jmc - any bill you have before going BR is included in the BR basically for the purposes of this, so this huge gas/elec bill is part of the BR. If you pay it using the windfall you could be seen as favouring certain creditors, which is a bad thing from the PoV of the OR -
*Any* money you get now hang onto and put into your bank account/stash under the bed. From that you can take out essential living expenses (eg, rent/normal food shopping etc) however you should not be paying large outstanding bills off with it - when are you planning on going BR? They won't cut your gas off tomorrow if you've only just had the bill, so don't stress too much - I' sure Fermi etc know exactly the state of play when it comes to normal bills etc.

This windfall will be wanted by the OR to share out between your creditors. So don't spend it.
Hope that helps.

jmc2305

Therein lies a problem - the oil/elec is paid for by the landlord - we pay him a direct debit of £180 per month (since july last year). He has just worked out the actual cost and we owe the extra. I do not want to involve him in the bankruptcy as he has been a good landlord and if we don't pay him we might be out of the rented home as well as the mortgaged home. Is this gonna be a problem? On our bank statements it says £1075 paid to him - this is rent and oil/elec. What if we asked him to put it up to £1175 to include this bill? Would that go down alright with the OR when it comes to it?