Married couples allowance

ronmiel

My husband is 76 years old and has a private pension, which last year was
around £8000 plus his state pension of £5508.
Last tax year 2009/2010 his tax code was 1122T this year it is 761T as his married couples allowance has been reduced from £6965 last year, to £3483 this year.
When I queried it with the HM Revenue and Customs I was told - we don't do 10% this year, we only do 20%. I have searched the HMRC and other income tax sites and I can't find any reference to 20% only 10%. Is this correct?
Now his private pension provider is taxing him on his monthly amount. I admit it is only a small amount, but should he be paying tax at all.
I hope somebody can advise me
Many thanks.

Elaine_Wilson

This could be right but the change should have taken place in 2008/09.

The 10% band was abolished from 6th April 2008 (apart from investment income which doesn't apply here).

Looking at 2009/10 his position is as follows.

Total income is £13,508. Personal allowance is 9,640 so taxable income is 3,868. Tax at 20% is £773.60.

The married couples allowance is 6,965 @ 10% = 696.50 leaving a liability of 77.10.

This year, using an allowance of 3,483 @ 20% = 696.60 gives the correct MCA.

It would be worth checking the position for 2009/10 as it might be that extra tax is due.

suso

Married Couples allowance has always been given at 10%
It is worth £696.00 to the claimant, if the full amount is put into the code, because the basic rate of tax is 20%, it would give a benefit of £1392.00, so in order to make sure the right allowance is given, a counter restriction is put in the code of 3482, this leaves a difference of 3483, which when taxed at 20% gives a benefit to your husband of £696.00

Your husbands code should show as follows

Personal Allowance (Elderly) 9640
Married Couples Allowance 6965
Total (A) 16605

Restrictions
State Pension 5508
HPAR 3483
Total (B) 8991

Total a-b = 7614 equals a code of 761Y