Marriage Allowance

There's a lot of confusion about the processes around the MAT - both within HMRC and amongst the public. Hopefully, the following doesn't add to it.

The process of Self Assessment has nothing to do with PAYE Tax Codes. Essentially, in Self Assessment your sources of taxable income are added up, your allowances are added up, the two are subtracted then the liability to tax is calculated and the results copied to Form SA302, the Tax Calculation.

Self Assessment of a MAT recipient is not affected by the amount transferred. If the transfer is validated, the MAT amount appears as a tax rebate on Form SA302.

PAYE Tax Codes are derived from the information in the SA302 and its within-HMRC equivalents. PAYE Tax Codes instruct those who pay you under PAYE how the money paid is to be taxed. The implication of this is that a PAYE Tax Code becomes irrelevant after the end of the appropriate year.

cuteusmaximus wrote: »

I've been investigating income for tax purposes this evening. In FY 2015/16 it transpires that my earnings were £10606 -- literally six quid above the personal alllowance. My husband earned an amount below the upper threshold. By virtue of exceeding £10600 (by £6!!) does this mean we not eligible for Marriage Allowance for Fy 2015/2016? Thank you

It's not a question of eligibility in your case. Transferring £1,060 of your allowance to your husband would mean he would pay £[STRIKE]232[/STRIKE] £212 less tax and you would pay £[STRIKE]232[/STRIKE] £212 more. So there doesn't seem to be much point in making the transfer.

For the allowance to be fully effective (i.e. £[STRIKE]232[/STRIKE] £212 tax saving), your taxable earnings would need to be below £9,540 for 2015/16 (£10,600 - £1,060).

Edit
Sorry, I incorrectly quoted the amount of the maximum tax saving. It is £1,060 x 20% = £212 (not £232 as originally quoted). I have amended the post accordingly.

ellatok27 wrote: »

What if I'm married and I have only earned £900 can I still apply for MA?

Hi ellatok27 and welcome to the forum.

Providing your spouse is a basic-rate taxpayer, yes, you can. For the maximum tax saving, their taxable income would need to have been at least £11,660 for 2015/16 (£10,600 + £1,060) but if it was at least £10,600 they will get some benefit from the allowance.

I applied online for the marriage allowance on the 8th of April ,we got the change of tax code letter but no chq for £212.00 , it's now the 18th of June , should I ring hmrc up ? . Thankyou for your help in advance .

we are still waiting for £212 to be refunded and we have now been told that the system didnt update itself to recognize the marriage allowance but that we will be paid the refund by end of june. apparently there are thousands that are waiting for the refund. we have been ringing them since end of april and get told something different everytime. we received a calculation this week which we also received at end of april stating that the 212 is owing aswell as my husbands refund for self employment. so i think its a waiting game.