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HMRC internal manual

Self Assessment Manual

Debt and return pursuit: overview: insolvency

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


  • 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.