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By Casey
Hi there,

I hope that one of the experts could answer this question if possible as soon as someone can. I might have a temp job offer for two months which would be great for my CV and also my income. However, I am naturally anxious that I could get a IPO and just wanted to quickly check what your opinion is. The hourly rate would be £14 and the hours between 16 and 18 per week. This would come to a total of between £992 to £1116 per month before tax according to my calculations. My total outgoings are £976 to what I filled in the form but I guess I could add another £10 for the increase in gas and then another £40 for travel, as the travel card will be around £80 per month. That would take it up to £1026. As I am not paying any tax but National insurance, I guess I would have to pay something like 12% National insurance, do you think I could get an IPO? I think, I could say to work only 16 hours but I would rather not if that would not cause me any problems. Also, how much money can you have in excess £10 or £20 per month?

I really hope this works all out as I would like to get of the JSA so much, it is not a nice life, but I do not wish to risk being on an IPO for 3 years, it just means that you will not be free.

Many thanks in advance for your excellent help.

Casey :?
By Melissa S
Hi Casey,

I think that from your calculations you should not have to start an IPA, as far as I am aware the disposable income allowance before needing to pay is £20 per month.

As you said in a previous post you were struggling to pay your bills therefore if you take this job your circumstances will be reviewed and it is important to make sure you give the correct information regarding your living expenses so your disposable income is calculated making sure you can afford to live.

The OR does not want you to be at the point of getting yourself into more trouble and debt so they will allow reasonable living expenses.

What happened with the overpayment of council tax? Did you speak to your OR?

I hope this helped a little and I am sure someone else here will have more advice.
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By Geraldine
Hi there Casey

Of course you should take this job if it is a good opportunity for you. I do not feel there is any question about that. Given what you have said about what you will earn and that fact that that it is only temporary over 2 months I do not feel you have anything to worry about.

If you work 18 hours at £14 an hour that is £252/week. This is £1091/mth (multiply by 52, divide by 12). I ran this number through an online tax calculator and it says that you will come out with £977.22 after tax and NI. As such given your total outgoings now + the extra travel I really do not think you will be at risk of having to pay anything to the OR.

If you have a look at the living expenses guide on BMD it gives £20 a month for entertainment and hobbies and £20 a month for emergencies so you could always add these into your budget as well if they are not already there.

Of course you would need to tell the OR if you take this job and they will probably send you a new income and expenses budget form to complete but I do not think you have anything to worry about and I cannot see that you are in any risk of getting an IPA.
By Casey
Hi Geraldine and Melissa,

Thank you so much for your quick reply.

I have come up with the same calculations, Geraldine, but what I do not understand is the 0 tax code, I have not deducted any tax as I have been told that I would not be taxed. Would you know how that works in reality? Say for instance I start the job next week, as it is a temp job, I will be paid weekly, therefore the week after, by that time, I guess the agency will not know that I am on a 0 tax code as they normally put you on a kind of emergency tax code until the IRevenue advises them of the correct tax code. I understand that the 0 tax code is in place in order to have more disposable income for your creditors. But in my case the 0 tax code would only benefit me, as I have not enough income to get an IPA?

Yes, of course, I would like to take the post, as it is very dismal not to work, even though I am studying part-time. I will of course inform the OR immediately should it all go ahead, I am just a bit nervous about it all, but your email has helped me already a lot. Also, I hope that the agency has not got a question in their registration forms about bankruptcy!!!, as you remember I could not take the job which was offered to me a while back because of that..

I am really appreciating your anwers.

Kind regards,

User avatar
By James Falla
Hi Casey

If you were to start a job whether it is temporary or permanent the employer will probably start you on an emergency tax code unless you can produce your P45 from your last job. HMRC will not change your tax code to zero until the OR tells them to do so and so it is very unlikely that this would happen straight away. In fact it normally takes a month or two to work through.

If and when your code does change (if you keep working long enough for this to happen) then at that point you would suddenly start to receive the additional tax you had been paying in your wages. You then inform the OR of that and they would tell you what to do. It may be that they would want you to pay this over to them. Alternatively if they feel you are still struggling financially they might simply allow you to keep this extra money.

This whole zero tax code situation only lasts until the end of the tax year within which you were made bankrupt so it would actually only remain zero until April next year if you keep working.
By Casey
Hi James,

Thank you ever so much for your quick reply that clarifies the situation. If the OR does decide that you have to pay the taxes over to them, does that mean you are then have to start an IPA as you have some excess money?

In my case the job last in the first instance for two months so they said but might go on longer, I had some jobs like that and they went on for a considerable time but one does not know. I also found out today that the hourly rate does include holiday pay so I guess that will not count as income? What does mean is when you temp you are entitled to holiday pay as everybody else and some agencies pay you that already on top of your weekly salary instead of paying you once you take the leave.

Also one other question, though I probably know already what you will answer. I have to go to the agency tomorrow and register there is a 50 50 possibility that there might be a question about Bankruptcy. I know that it would be wrong but I am really struggling for money plus I need to get into work again very soon and it would be very upsetting for me if I was turned down again. I am contemplating of crossing no should there be such a question as the agencies will never check that out, the job is in the non for profit sector so nothing to do with finance. I know it would be wrong and perhaps it is not a good idea, but I would hate to be turned down again and my confidence has suffered already. Surely should they find out later, it might be a problem because I did not disclose it. What is your opinion on that? I am praying that there will not be such a questions, I have worked with many agencies in the past and some have got that question in their forms some have not, it will be destiny, I guess.

Many thanks again for your brilliant help, I shall thank you forever and certainly pass on the message to anybody out there who needs some financial advice.
User avatar
By James Falla
Hi there Casey

I think it will be unlikely that the agency will ask you if you have ever been bankrupt. However if they do then given your situation I think I would risk it and say no. I think it is very unlikely that they will actually check. The worst that can happen is they find out later and you lose out on the job but you just have to cross that bridge when you come to it I guess. If you don't get past the first hurdle you will never have a chance. Good luck for tomorrow.

To answer your question about whether paying your tax to the OR constitutes an IPA, not it does not. Once April comes around and any tax you are handing to the OR stops then that is the end of it. This payment of tax is not an income payment so there is nothing to worry about there.
By Casey
Hi James,

Thank you so much for your quick reply.

That is what I am going to do, I will just take the risk in case there is a question about it, as you said it is very unlikely that they will check that out and if so, then there is still a chance that they will be tolerant towards the situation, as it is an agency and all they are really interested in is getting the comission on your hourly rate. I am going now tomorrow afternoon to register not today and as it looks like, keep fingers cross!!!, I shall be starting the job on Monday.

I shall definitely report back what happens tomorrow and after that, as this might be helpful for other people too struggling with the same problems.

Many thanks again, it helps so much to get clarification on some of the puzzling issues surrounding bankruptcy and the forum also helps a lot with keeping and getting your confidence back. :)

Kindest regards,

User avatar
By Hayden
Very good luck with this job application Casey. I really hope that you get this one and that your bankruptcy does not stand in your way this time.
By Casey
Hi James and Hayden,

Thank you so much, I started the job on Monday! The agency had no question about bkruptcy in their forms but I was ready to not tell the truth to be honest. There were lots of questions about criminal records, jail, assault, violence etc, I think the agency deals with the lower end of the market, so that was my luck. The job is part time and I just wanted to check with you again, as I still cannot fully grasp the 0 tax code thing. The way I understand and as James has well explained is that after a while once the IR allocates the tax code after being told by the OR to the employer, I will receie all the tax I paid back with my wages. The OR then decides whether I can keep the money or whether that should be going to the creditors. But then the next wage will be paid to me with 0 tax and that is what I would like to know: Is this wage with 0 tax but NI deducted then the amount the OR uses to decide whether I should get an IPA? I calculated every thing again and again and if I work 18 hours it would be a salary of £977.37 tax deducted of 61.07 and 53.56 NI. If 0 tax that would be a net earning of 1038.44. If I worked 16 hours then the 0 tax salary would be 931.67. On my expense claim form my total outgoings amount to 956 including rent, council tax etc. It is quite close, I think, and I am worried that the 18 hours could get me an IPA? I still need to add more money for travelling and perhaps I can add a bit more for food, I stated 250 because I live on a special diet. I included the 20 for emergencies and entertainment as you suggested. Could I also add 10 for dry cleaning? Also, some of the sums are estimates like gas and electricity do you have to provide copies of gas bills, travel cards etc to the OR?

Many, many thanks in advance for your help and reply.

Best wishes,