If you’ve been made bankrupt, your Self Assessment responsibilities may change. One of the most important changes is how you use your Unique Taxpayer Reference (UTR).
Understanding which UTR to use can help you avoid delays and ensure your tax returns are processed correctly by HMRC.
What Happens to Your UTR?
When you’re made bankrupt, your existing UTR remains valid only for the Self Assessment tax return covering the tax year in which you were declared bankrupt.
If you need to file Self Assessment tax returns for later tax years for example, because you’re self-employed, continue trading, or have other income that requires Self Assessment you cannot continue using your previous UTR.
Instead, you’ll need to register for Self Assessment again, and HMRC will issue you with a new UTR for your post-bankruptcy tax affairs.
Which UTR Should You Use?
Use the correct UTR for the relevant tax year:
- Old UTR: For the Self Assessment tax return covering the tax year in which you became bankrupt.
- New UTR: For all Self Assessment tax returns relating to tax years after your bankruptcy, where a return is required.
Using the correct UTR helps ensure your tax records are kept accurate and up to date.
Why Does HMRC Issue a New UTR?
HMRC issues a new UTR to keep your pre-bankruptcy and post-bankruptcy tax affairs separate. This allows HMRC to:
- Process tax returns correctly.
- Maintain accurate tax records.
- Allocate tax liabilities to the correct period.
- Reduce the risk of administrative errors.
What Happens If You Use the Wrong UTR?
If you submit a post-bankruptcy Self Assessment return using your old UTR, HMRC may need to manually correct your records before processing your return. This can lead to:
- Delays in processing your tax return.
- Delays in receiving any tax refund you’re due.
- Additional correspondence with HMRC.
To avoid unnecessary delays, always use the UTR that applies to the relevant tax year.
Frequently Asked Questions
1. Do I automatically receive a new UTR after bankruptcy?
No. If you need to file Self Assessment tax returns after the tax year in which you were made bankrupt, you’ll generally need to register for Self Assessment again so HMRC can issue a new UTR.
2. Can I continue using my old UTR?
Only for the Self Assessment tax return relating to the tax year in which you became bankrupt. A new UTR should be used for any later tax years where a Self Assessment return is required.
3. Why are there separate UTRs?
Separate UTRs help HMRC keep your tax affairs before and after bankruptcy separate, ensuring your returns are processed accurately.
4. Will using the wrong UTR result in a penalty?
Using the wrong UTR does not automatically result in a penalty, but it can delay the processing of your tax return while HMRC updates your records.
Final Thoughts
Bankruptcy doesn’t necessarily end your Self Assessment obligations. If you’re required to file Self Assessment tax returns after the tax year in which you were made bankrupt, you’ll usually need to register again so HMRC can issue you with a new UTR. Using the correct UTR for the correct tax year will help ensure your tax returns are processed smoothly and minimise unnecessary delays.