Married Couples Allowance

Badmintonplayer

Just received my PAYE Coding Form for 2011/12 tax year.
THe "Married Couples Allowance" has been given as a figure of £3648.
They state that "You get the Married Couples Allowance of £729.50 by having £3648 included in your tax free amount.
Is this an error as the full allowance is £7295?
Last year I had the full allowance of £6965 included in the tax free amount.
My remuneration is under the limit where the tax people start taking away benifits.
Could somebody please explain why the tax free element has been set at £3648, thanks

noh

The married couples allowance, available if you were born before 6th April 1935, is £7,295 for the 2011 2012 tax year.
Tax relief for the married couples allowance is given at the rate of 10% therefore half of £7295 ie £3648 is included in the tax free amount.
It hasn't changed from this tax year when half of £6965 would have been included.

http://www.hmrc.gov.uk/incometax/married-allow.htm
http://www.hmrc.gov.uk/rates/it.htm

Badmintonplayer

Think they must have got it wrong last year!

jem16

I had googled this to answer another thread as I thought it was usually half as well and the poster had been given the full amount.

Apparently if your total income is lesss than the personal allowance plus the 10% savings band they use the full allowance.

http://taxaid.org.uk/situations/pensioners/paye-and-the-married-couples-allowance

Badmintonplayer

So has it changed due to the 10% tax band being disbanded ?

I can't get my head around these words in the above link:-

So which figure should HMRC put in your tax code – £6,965 or £3,482.50? If they use £3,482.50 you may pay too much tax. If they use £6,965 you may pay too little tax! The solution is to guess which rate of tax will apply to your income – 10% or 20% – use the appropriate figure, and tell you that the result is only valid if your actual income doesn’t exceed the figure they print on the form you are sent (in 2010/11 this figure was £12,080).

Any help please?

Mrs_Arcanum

The new standard rate will be £7,475 so as even this is more than the higher figure, unlikely to pay short.

jem16

Badmintonplayer wrote: »

So has it changed due to the 10% tax band being disbanded ?

No the 10% band is still there for savings but only if your total income falls below the personal allowance plus 10% band.

I'm going to assume you are over age 75 as the married couple's allowance is for those born before 1935.

Personal allowance for 2011/12 is £10,090 plus 10% band for savings of £2560 - total is £12,650. If your total income is less than this it seems the full allowance is given. If your total income is higher than this the half allowance is given.

Which category do you fit into?

Badmintonplayer

Mrs_Arcanum wrote: »

The new standard rate will be £7,475 so as even this is more than the higher figure, unlikely to pay short.

Sorry Mrs A don't understand.
What new stadard rate will be £7475?
Also what do you mean by the words following this statement?

jem16

Badmintonplayer wrote: »

Sorry Mrs A don't understand.
What new stadard rate will be £7475?

Mrs A is thinking of the new personal allowance for under 65s which has nothing at all to do with this thread.

Also what do you mean by the words following this statement?

That's just her signature - ignore them as they have nothing to do with you.

Badmintonplayer

jem16 wrote: »

No the 10% band is still there for savings but only if your total income falls below the personal allowance plus 10% band.

I'm going to assume you are over age 75 as the married couple's allowance is for those born before 1935.

Personal allowance for 2011/12 is £10,090 plus 10% band for savings of £2560 - total is £12,650. If your total income is less than this it seems the full allowance is given. If your total income is higher than this the half allowance is given.

Which category do you fit into?

Thanks, think I've got it.
I assume you count the National Pension as part of the income? If so I am over the £12.65K limit.

jem16

Badmintonplayer wrote: »

Thanks, think I've got it.
I assume you count the National Pension as part of the income? If so I am over the £12.65K limit.

Yes state pension, personal pension and savings income should all be counted.