Annual review - change in tax/company car

[pavel33]

I have my first annual review on my IVA due in approximately 2 months time. I have submitted all of my monthly pay slips to my IVA provider on a quarterly basis and been formally advised that nothing is owing.

Whilst my salary hasn't increased at all since I entered into my IVA I have changed company car (previously had a gas guzzling 4x4 forced on me by my employer) and as a consequence my monthly income is (and indeed has been for several months of the first year of my IVA) significantly (over £250) higher.

Am I correct in thinking that given this change of circumstances my monthly payments will significantly increase after my annual review ?. Is it possible I could be asked for 100% of the additional 'income' (even though it isn't as a result of a salary increase, bonus, overtime etc) ?. I don't 'object' to doing so, but would appreciate clarification.

Regards.

Adam

[Michael Peoples]

I am very surprised that your IP has not noticed the changes in your income. Your tax code was obviously amended from what was on the original proposal and your income has gone up. This was not bonus, overtime, commission or similar nor was it a pay rise.

Had you changed your vehicle pre IVA this full amount would have been included in your income and expenditure account and your payments would be substantially higher.

If your IP is happy to overlook this you should keep the evidence that there is nothing more to pay in case someone notices later. Who is the IP?

[pavel33]

Thanks for your reply Michael, my IP is Payplan - when I first submitted my pay slips the first quarter after entering into my IVA I was totally open with them and explained that the change was due to a different company car. And I have received formal letters from them every subsequent quarter confirming that having reviewed my pay slips and that there is nothing outstanding.

That's why I was curious as to what will happen during my first annual review - in many ways it was being forced to drive a gas guzzling company car for a long period of time which resulted in me having to enter into an IVA in the first place.

[Michael Peoples]

If they are happy to interpret your income in that way, maybe they will not increase your payments at all. It seems a little bizarre because apart from the reduction in your tax, it may be that your petrol/diesel costs have come down. Given that any expenses are paid by the mile,irrespective of the vehicle, should also have saved you money.

I would not want to second guess what another firm is doing but personally I would have been looking for an increase in your contributions at the time. But if Payplan have differing views or are confused and do not understand you might get away with keeping it or at least have half of your increase in surplus.

[Sensible77]

I’m with PayPlan and they will review your payment for the next year at the annual review. If your take home pay has increased by virtue of less tax due to the change of company car then your contribution will need to increase. However, when you do your review make sure any expenditure that has increased since your IVA started is taken into account. So far, I’ve had 3 annual reviews with PayPlan and each has been very straightforward.

[pavel33]

Thanks all, that's what I expected. The ironic thing is that I now calculate that if my monthly payments are raised after my first annual review (by the full difference of the tax resulting from the change in company car) I will actually end up exactly paying off as much (including what I will have paid prior to my first annual review) as I originally owed to my creditors when I took out the IVA !.