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Will HMRC chase PT debt of bankrupt?

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Hello

The 17/18 personal tax liability for a bankrupt individual is to be included in the bankruptcy petition. Which I image will then be discharged when the bankruptcy is completed.

My question is - will HMRC still chase the debt in the normal way? – The individual has no way of paying the tax. Or will they ‘know’ it‘s included in the bankruptcy and not chase the debt?

Should the individual inform HMRC that the 17/18 personal tax liability is included in the bankruptcy? And will HMRC stop chasing the debt once the bankruptcy is discharged?

Thanks for your help

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22nd Nov 2018 14:09

Provided the debt was incurred before the bankruptcy and has been declared to the Trustee. HMRC cannot chase the debt after the bankruptcy has concluded. All creditors will be informed but it doesn't hurt for the client to tell them as well

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22nd Nov 2018 14:54

HMRC may chase the debt for a little while after the BKY takes place before it filters through that the debtor is insolvent and they update their records.

They cannot chase for a debt which is included in the BKY.

Usually the Tax claim in the BKY will be for the entire tax year so if the individual went Bankrupt in say, June this year, HMRC would submit a claim to April 2019 in the BKY.

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