Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By mariem
#1900 Hi,

I've noticed from this forum that tax codes go back to zero after bankruptcy... does that therefore mean that my employer will find out I've become bankrupt... my employer (or the accounts dept for my employer) handles all tax etc from my wages... surely they will notice if my tax code changes? Or is this not the case - I have no clue about these things and want to get my facts straight before I petition for bankruptcy!

Mx :?
By keepchinup
#1901 Your employer will be sent a new tax code of NT. I think it's just a new "notice of coding" and employers get these all the time for people, but the NT one is unusual. It might get noticed, as there are only a handful of reasons people get such a code, and the main one is bankruptcy. Depends how big your employer is, as to whether they would do anything about it. I would suggest they can't discipline or fire you for it, you've done a perfectly legal thing. Certain professions do say no bankrupts in the offers of employment.

There's some thinking that those who go bankrupt in December or later don 't end up with this NT code, as the inland revenue don't see the point for only 3 months or so. Remember this no tax code only lasts to the april after you went bankrupt - ie the current tax year.

Any tax you don't pay usually has to be sent to official receiver by you.

Hope this helps.
By mariem
#1902 Thanks keepchinup... that does help. My contract at work finishes mid-November, so I think I'll leave it til then to petition... if I switch employers it might not get noticed! And if I don't get another job til December then the tax code might not even be changed anyway!

Thanks again.