For employed people, their tax code changes to NT (No Tax) until April the following year. Your Payroll Dept. will be advised of the change, but will not be given a reason and you will be paid gross of tax and instructed where to pay this tax (you don’t get away with paying it!).
The reason for this is that the Insolvency Service uses some of the money to offset its costs and distributes the rest among your creditors. This might sound complicated, but it’s a fairly seamless procedure and doesn’t inconvenience people too much.
‘Does my tax code change when I go bankrupt’ is just one of hundreds of questions we’ve answered over the years, but feel free to call us on 01425 600129 if you need to know more or specifically need bankruptcy help. We are here to help.