PAYE13062 - Coding: coding: general principles: bankruptcy: cases dealt with in Scottish court (Action Guide)
The accountant in bankruptcy (a government agency) is appointed as trustee in the majority of sequestration cases in Scotland.
Note: NT coding is not applied - no repayment is made from the date of sequestration.
If the case involves a bankrupt employee / occupational pensioner who has been dealt with by a Scottish court, follow steps 1 - 16 below. This guide is presented as follows
Initial action in all cases
| 1. |
Trace the PAYE Service / SA record, see PAYE120015 for guidance on trace and match |
| 2. |
View Contact History / SA notes |
| |
Note: If the ‘sequestration’ aspect of the case is being worked in another office, you should only request the ‘sequestration’ papers from that office where full information is not available on the record; make a clear Contact History / SA note of your actions, see PAYE105020 for guidance on Contact History notes |
| 3. |
PAYE Service / SA - Review the name and address, update if necessary |
| 4. |
PAYE Service - Review for deceased indicator and address any correspondance with trustee accordingly |
| 5. |
PAYE Service - Remove the HR Indicator if necessary |
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Update the record
| 6. |
PAYE Service - Set the ‘Inhibit automatic reconciliation’ indicator for the year of sequestration |
| 7. |
PAYE Service / SA - Set the ‘No repayment’ indicator |
| 8. |
PAYE Service - Review and remove ‘No allowances’ indicator where necessary |
| 9. |
PAYE Service - Review and reconcile pre sequestration years, noting details of any underpayments |
| 10. |
PAYE Service - Leave the tax coding for CY unchanged; code NT does not apply in sequestration cases |
| |
Note: Do not code any underpayments for pre sequestration years |
| 11. |
PAYE Service - Update IABD for CY+1 as normal with all known income details |
| 12. |
Where requested, estimate the tax due for the whole of CY using all information held on the record, such as earlier years forms P14 or earlier years self assessment tax returns |
| |
Note: Do not contact the employer for any information |
| 13. |
If the employment has changed or there is no pay and tax information on the PAYE Service / SA records, make a note on the sequestration papers and advise the requestor (accountant in bankruptcy) |
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Note concerning PAYE / SA unlinked or no SA record
NPS is unable to deal with the year of bankruptcy for PAYE cases where the year is split between the pre and post bankruptcy period and there is tax liability on income that commenced after the date of sequestration. In Scottish sequestration cases, as code NT is not operated, it is not usually necessary to set up an SA record unless the SA criteria is met or there is additional tax liability, for example on benefits received from a new employment which commenced after the date of sequestration.
Where no SA record is required the year of bankruptcy for these cases should be dealt with on NPS by setting the year to ‘Reconciled - Balanced’ at the end of the sequestration year or on completion of all enquiries.
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SA record required
| 14. |
Take action as directed at SAM106033 steps 14 - 19 to set up an SA record for the year of sequestration where necessary |
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Referral to a Band O technical support officer
| 15. |
A bankrupt person is normally (but not always) discharged from bankruptcy one year from the date of sequestration |
| |
If there is a claim to a PAYE repayment, you should submit the case to a Band O technical support officer |
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Final actions
| 16. |
Make a Contact History / SA note of the sequestration details and where the papers are filed, see PAYE105020 for guidance on Contact History notes |
