PAYE13035 - coding: coding: general principles: bankruptcy

If an employee or occupational pensioner becomes bankrupt you must be careful to follow the special rules that apply in these cases.

Full details of the rules covering bankruptcy can be found in the Insolvency (INS) Manual, section ‘Determination of Claim’, under the subject ‘Employee's Contingent Liability’.

Interim orders or voluntary arrangements do not affect PAYE deductions. In these cases leave the coding unchanged.

General rules

The following rules apply to all cases

• When you write or speak to the employer / pension provider never refer to the employee / pensioner as bankrupt
• Use COP Function NO to add an historical note to the record using these words
• • BANKRUPTCY RECEIVING ORDER (date)

Or

Or in Scotland

• Use COP Function TA to set the NOREP signal

Coding action

When an employee or occupational pensioner becomes bankrupt the coding action you need to take will be different if Scottish rules of law apply.

Follow the instructions in the appropriate Bankruptcy action guide.