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The term insolvency is used to describe both an Individual Voluntary Arrangement (VA) and Bankruptcy (BY) (Scotland - Award of Sequestration).

The Department’s claim in both types of action is handled centrally by

• The Voluntary Arrangements Service (VAS) at Enforcement & Insolvency Service (EIS) Office Worthing for VAs

And

• The Insolvency Claims Handling Unit (ICHU) at Newcastle for bankruptcies & sequestrations

See the Insolvency Manual for further details of the roles and responsibilities of these two units.

The taxpayer may continue to receive income and / or gains that are liable to SA after the relevant date. In this event, the taxpayers tax affairs to the date of the bankruptcy / VA must be separated from those from that date.

Where an SA taxpayer continues to receive taxable earnings after the relevant date a second SA record, with a different Unique Taxpayer Reference (UTR), is required.

SA function SET UP POST BY / VA INDIVIDUAL is used to create a new SA record for the period following the BY / VA and the computer will automatically allocate a new UTR.

When the new UTR is set up by using SA function SET UP POST BY / VA INDIVIDUAL the UTR of the

• Original SA record is automatically stored on the new record
• New SA record is automatically stored on the original record

Further information on how taxpayer records are affected is available in section ‘Bankruptcy� (SAM106000).

The main guidance for dealing with VA / BY cases is in the Insolvency (INS) Manual.