Marriage Allowance

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  • polymaff
    polymaff Posts: 3,904 Forumite
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    edited 10 December 2017 at 5:24PM
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    @Emma2195

    An MAT requirement is that both parties be alive on one day of the relevant tax year.
  • Kitty_Fingers
    Kitty_Fingers Posts: 7 Forumite
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    Hi

    Sorry if this has been asked before, but I have a question regarding how we are paid back the money owed to us due to the marriage allowance. They have sent us a letter for the year 2016-17, which says we have to claim online, they haven't sent us anything about 2015-16, but when I asked them they said it was being processed. I asked them about a third due payment, which I assume is for this year, but they refused to answer my questions. All I wanted to know is how any tax we have overpaid for this year would be dealt with. Would it be the same as the previous 2 years, ie we'd be sent a letter with what we are owed and how to claim it, or would it be given back as a tax reduction in my husbands pay, and if so, when will that reduction start?

    I think I have probably over thought this, but how will it be paid to us? I'm a bit confused about this year, regarding how and when we will receive it. My husband had a look on the internet, but I think he understands it less than me!
  • p00hsticks
    p00hsticks Posts: 12,820 Forumite
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    Kitty_Fingers wrote: »
    Hi

    Sorry if this has been asked before, but I have a question regarding how we are paid back the money owed to us due to the marriage allowance. They have sent us a letter for the year 2016-17, which says we have to claim online, they haven't sent us anything about 2015-16, but when I asked them they said it was being processed. I asked them about a third due payment, which I assume is for this year, but they refused to answer my questions. All I wanted to know is how any tax we have overpaid for this year would be dealt with. Would it be the same as the previous 2 years, ie we'd be sent a letter with what we are owed and how to claim it, or would it be given back as a tax reduction in my husbands pay, and if so, when will that reduction start?

    I think I have probably over thought this, but how will it be paid to us? I'm a bit confused about this year, regarding how and when we will receive it. My husband had a look on the internet, but I think he understands it less than me!

    Are you and your husband paid via PAYE (either for employment or by getting a private defined benefit pension) ? If so, the recipient should get the allowance via a change to their tax code which means that less tax will be deducted at source.

    I think that refunds for previous years are sent via cheque (or if you have accessed your online tax account, you might have an option to simply nominate a bank account for it to be transferred into - I know they now do this for other end of year tax refunds).
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
    edited 14 December 2017 at 9:51AM
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    Kitty Fingers

    Their is no "we" or "us" with Marriage Allowance, the consequences of applying affect each person differently.

    If you applied then you will either notice no change or pay more tax. You can never get a refund or pay less tax as a result of applying for Marriage Allowance.

    But if you applied your spouse will see a reduction in their tax (assuming they pay enough in the first place).

    Tax due back for the tax years which have already ended will be in a lump sum, either a cheque or possibly the option of your spouse going into his personal tax account and pulling the money into his bank account.

    If your spouse is working or gets a pension anything they are due for this tax year (2017:18) will be done via a new tax code. A few months worth of the Marriage Allowance (for period April to December) will come back via reduced tax next time his employer pays him (after they get their copy of his new tax code) and the rest will be reduced tax each payday to the end of the tax year.

    So what has your spouse actually received from HMRC?

    In your post you say They have sent us a letter for the year 2016-17, which says we have to claim online but I wouldn't think HMRC write to couples unless they are in business together. Do you mean they wrote to your spouse? And if so what has to be claimed online? Marriage Allowance or is it a message to say your spouse can go online to get the tax refund which has come about because of you applying for Marriage Allowance?
  • Kitty_Fingers
    Kitty_Fingers Posts: 7 Forumite
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    I just used the terms 'we' and 'us', because all our money is pooled together. I get that I claim and it goes to him. It was taken off the tax he pays on his payslip, so I already have my answer. Thank you for taking the time to reply though. :)
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
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    HMRC do not repay Marriage Allowance tax refunds for previous tax years through the current tax code so anything he has received back that way would only be for 2017:18.

    So is your husband still missing the refund for 2015:16 or was it included in the letter (calculation?) he received for 2016:17?
  • potts8
    potts8 Posts: 60 Forumite
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    edited 20 December 2017 at 1:26PM
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    I think I may have misunderstood if I have been eligible for Marriage Allowance for the last couple of years but if anyone could verify if I'm right it would be appreciated.

    I understand this is for basic tax payers however I was of the understanding that if you have other allowance such a pension relief at 40% and that brings you back down to the basic rate then you are still eligible?

    Approx example below:

    2016-17
    Salary: £45500(High rate payer, this is shown as my taxable income)
    Pension contributions: £4500(Relief at source, not salary sacrifice)
    Salary after pension relief: £41000(basic tax payer)

    I thought this made me eligible but apparently not. Its only if you are a basic tax payer with out any allowance paid.

    Is that everyone else's understanding?
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
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    If you have told us the whole story and don't have any other income you've not told us about, which with the greatest of respect is not always the case on these threads, then I cannot see what the problem is?

    You are a basic rate payer. If you can persuade your spouse to apply for 2016:17 then you should see a reduction in your tax payable of £220.
  • potts8
    potts8 Posts: 60 Forumite
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    Nope, no other income to mention. It was my understanding also that I should be able to claim this but he was giving me the impression that you can't benefit from both the pension relief at 40% and also the marriage allowance when the relief brought me back down to 20%
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
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    You definitely should not claim it.

    Anybody claiming Marriage Allowance can either pay the same tax or more, they can never ever pay less as a result of claiming.

    Who is "he"?
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