MSE News: Couples now able to register to shift tax allowance between spouses

notbritishgas

Claire_Steele wrote: »

We applied for the marriage allowance transfer over a month ago. Straight away I received my new tax code for this year and next year and received my tax back for this year. I am still waiting for the allowance to be allocated to the year 2015/16. I am due all of my tax back for that year but when I contact HMRC they keep telling me that there is a technical fault for the allocation of that year (2015/16). Has anyone else encountered this? TIA

I (well my wife) applied to transfer the allowance to me about 3 weeks ago. I received my new tax code about a week ago.
When applying it said I would receive a cheque for the previous years tax refund. To date I have not received it.

clairec79

we did it before xmas, tax code changed but no cheque

pmking_uk

stalkah wrote: »

I earn 42,500 a year with my bonus however I have a company car and the benefit in kind is about another £6k on that. Does this mean I wouldn't be eligible?

I would also like to know the answer to that. My company car is taking me over the 43k. HMRC said it bases it on the figure I paid tax on - which was above 43k, although my actual salary (even with bonuses etc) is not over 43k. They said for me to talk to my employer. I have a feeling I'm going to go round in circles.

Dazed_and_confused

Based on what you've put then no you wouldn't be eligible as you appear to be a higher rate payer.

That is the crucial thing with marriage allowance, higher (or additional) rate payers cannot benefit so if your taxable salary and car benefit mean you pay higher rate tax then you can't benefit. If you pay into a sipp or personal pension then this can increase the amount you pay basic rate tax on - would this be relevant to you?

God knows why HMRC have said speak to your employer, absolutely nothing to do with them (unless you're asking for a pay reduction :eek:)

polymaff

The legislation states that the condition is that:

"the individual is not, for the tax year, liable to tax at a rate other than the basic rate, the dividend ordinary rate or the starting rate for savings,"

Homerjcook

I have registered for the allowance and have been getting part of my wifes allowance for the last two years. My wife has now changed her job and is earning more so i wish to give her full allowance back, going on the hmrc website if i cancel it wants to cancel and back date to 2016? Is this correct? Thanks

Dazed_and_confused

I have registered for the allowance and have been getting part of my wifes allowance for the last two years

That's impossible. I guess your wife registered, if you had done it you would be giving your allowance to her.

As for cancelling it then yes if you, as the receiver, cancel it then it goes back to the beginning.

I think you should be getting your wife, as the giver, to cancel it. The status quo will remain for the current (and previous) tax year(s) but you will both be back to normal from April 2019 onwards.

Check out the "If your circumstances change" part of the Marriage Allowance section on gov.uk

If you both earn enough it is unlikely to make any difference to you financially as a couple of the transfer is in place this tax year but without knowing your taxable income (and where it arises from, wages, savings interest etc) it's impossible to be 100% certain.

polymaff

Homerjcook wrote: »

I have registered for the allowance and have been getting part of my wifes allowance for the last two years. My wife has now changed her job and is earning more so i wish to give her full allowance back, going on the hmrc website if i cancel it wants to cancel and back date to 2016? Is this correct? Thanks

You might want to check first whether it is worth cancelling MAT. There are very few circumstances where couples lose by remaining in MAT.

Homerjcook

I registered on my wifes behalf so it is the right way around, so if im right in saying, stay registered but hmrc will see that we are no longer eligible for me to use my wifes allowance and will redistribute accordingly without me having to officially de-register?? Thanks very much

Dazed_and_confused

You are confusing being eligible (generally anyone not higher rate payer or claiming Married Couple's Allowance) and being able to benefit from Marriage Allowance.

HMRC will only change things if either of you are no longer eligible. So if you are both straightforward basic rate payers then nothing will change unless you (or your spouse) ask for it to be cancelled. Two basic rate payers each earning taxable salary of say £35,000 are perfectly eligible for Marriage Allowance. There's just no financial benefit in applying.

So in theory you could end up worse off by doing nothing, if for example you had particularly low income and couldn't benefit in full from the Marriage Allowance tax credit whilst at the same time your wife could have benefitted from the full Personal Allowance.