i was made bankrupt in 2005 and have been told now as a discharged bankrupt i have a tax rebate?

Question

i had a tax refund in 2004/2005 and the official recievers took it. what i want to know is can they take the tax refund i have been awarded for 2005/2006. we were told we were going to get this refund now the tax said they have to offer it to official recievers. even though we never put in the tax for that year until we were discharged ..... can they do this???

Answer 1

Normally when you are made bankrupt you are put onto a No Tax coding and have to account to the receiver for the deductions which should be made. The system works like this so that your employer does not have to know you have been made bankrupt.

So any tax refund will either relate to the period before you became bankrupt or the period between the bankruptcy and the following 5th April.

If it is in the first period then I think it should be counted as part of the assets of the bankruptcy and so kept by the receiver.

If it is in the second period then it would imply that you paid the receiver too much in accounting for the tax deductions You should therefore be able to keep the refund. I am assuming that you did pay over the tax deductions to the reciever in the first place.

Answer 2

if you in the UK I would contact you local citizens advice bureaux.