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tAX rEBATES WHILE BANKRUPT

Hi

Can anyone give advice on this please. A client went bankrupt in Jan 2013 and has been Self Employed since Feb 2012. As there was no change of source of income during the tax year of the Order I understand that any tax due for the whole year is included in the order. The client operates under the CIS as a sole trader so is stopped 20% at source. My questions are ;

1 Does this mean that no tax is due for the year 2012/13 ?

2 If so will the tax deducted be repaid to the taxpayer or taken by OR as if PAYE no tax would be deducted with a NT coding and the bankrupt would receive the financial benefit.

Many thanks to all.

Simon

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27th Feb 2013 15:42

Any tax due up to the date of the Bankruptcy Order will be part of the bankrupt estate. Any earnings after the date of the bankruptcy are taxable in the usual way.

 

Any tax repayable for the period up to the date of the bankruptcy will belong to the OR for the benefit of the creditors of the bankrupt

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By Pelican
27th Feb 2013 16:52

Also note...

that once a person is bankrupt and if that person still works as self-employed then HMRC will issue them with a new UTR.

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