Marriage Allowance

Theimp

We have been stung by the tax office even though they gave us the money after we filled out the forms.
In the 1st year one person had to earn under £10,600 to be able to transfer the allowance to their partner. What they don't tell you is that the person who earns under £10,600 must also earn under 10% of that figure too so really in that first year one person must earn under £9,540. This 10% rule is not clear on HMRC website and I just hope no one else gets stung by this.

Dazed_and_confused

There is no such rule. You could both be earning £40k and still be eligible for Marriage Allowance but you almost certainly wouldn't be able to benefit from it.

Generally a couple where the applicant is earning (as in wages/pension) between the standard Personal Allowance and reduced amount from applying for MA and the receiver is paying £238 or more in tax are no worse off as a couple.

You will need to post some figures for anyone to check if you are actually worse off as a couple but imho it is unlikely.

Theimp

We were on the phone for an hour and they didn't budge on that 1st year. I quoted this site and HMRC and they insist we pay that 1st year back. They even agreed one of us was under £10,600 in that first year but insisted one of us had to ear £9,540 or below to be able to claim the allowance.
This 10% rule applies for every year but we only got stung on the 1st year.
If they are talking rubbish then who can I contact to sort this out because they were not budging on this.

Dazed_and_confused

Rules seem to be being made up that simply don't exist.

As an example

2015:16 tax year
Mrs Theimp
Taxable wages £10,000
Personal Allowance £9,540
Tax due on £460 = £92

Mr Theimp
Taxable wages £20,000
Personal Allowance £10,600
Tax due on £9400 = £1,880
Less Marriage Allowance credit £212
Net tax payable £1,668

By applying Mrs Theimp has made herself liable to pay tax of £92 but Mr Theimp benefits by the Marriage Allowance credit of £212.

As a couple Mr & Mrs Theimp are £120 better off.

And hopefully Mr Theimp will pass some of his tax saving to Mrs Theimp

To be honest it would be helpful if you could actually explain in simple terms what has happened, what paperwork have you received etc

Have you ever been a higher rate payer?

Have you (as the receiver of Marriage Allowance) ever cancelled it?

sheramber

If you already had the allowance transferred what prompted them to take it away again?

You could try phoning again as you will probably get someone else who may be more informed. Phone lines are open 8am to 8pm but you can get an answer just before 8am.

If that doesn't work then write a letter of complaint

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/complain-about-hmrc

polymaff

DHolmes813 wrote: »

I was claiming the MA as my wife had stopped work back in 2015, so we decided to make uses of this allowance.

My wife is now going back into work and I stopped the MA.

I have now received Tax calculations for 6 April 2015 to 5 April 2016; 6 April 2016 to 5 April 2017 and 6 April 2017 to 5 April 2018, and they all say I've paid too little tax. Totals around £660 for the three years., which they say I have to pay back.

Have I misunderstood the MA or have HMRC made a mistake!?
Can anyone advise please.

You've misunderstood.

To understand MAT there are two areas you - and many - need to get clear. One is the difference between eligibility and possible benefit accrued. The other - the one you illustrate in your post - is who is who.

When MAT is being set up there is no role for the beneficiary. From what you write, I'd guess that you (singular) were meant to be the beneficiary, in which case YOU (singular) didn't claim MAT.

When MAT is being cancelled, both parties can apply:

1 If the beneficiary applies then MAT is cancelled for the entire period that MAT was active and tax demands and rebates may happen.

2 If the elector (HMRC's terminology) applies then the MAT ends at the end of the current tax year.

Many have been fooled - by HMRC and the Lewises - into thinking that this is an easy couple of hundred quid. As many have discovered - it isn't.

Theimp

After 3 years of getting the allowance we got a letter through the door stating we paid too little tax and that we owed £663.80.
Using the figures that Dazed provided...

2015:16 tax year
Mrs Theimp
Taxable wages £10,000
Personal Allowance £9,540
Tax due on £460 = £92

Mr Theimp
Taxable wages £20,000
Personal Allowance £10,600
Tax due on £9400 = £1,880
Less Marriage Allowance credit £212
Net tax payable £1,668

Mrs Theimp wages were £10,400 NOT the £10,000 seen above. They claim the personal allowance is the figure Mrs Theimp must be earning(10%) for the £212 Marriage Allowance.
After being on the phone for an hour the tax office still wanted the £212 from that first year and only the £212 from that first year.

polymaff

Theimp wrote: »

After 3 years of getting the allowance we got a letter through the door stating we paid too little tax and that we owed £663.80.
Using the figures that Dazed provided...

2015:16 tax year
Mrs Theimp
Taxable wages £10,000
Personal Allowance £9,540
Tax due on £460 = £92

Mr Theimp
Taxable wages £20,000
Personal Allowance £10,600
Tax due on £9400 = £1,880
Less Marriage Allowance credit £212
Net tax payable £1,668

Mrs Theimp wages were £10,400 NOT the £10,000 seen above. They claim the personal allowance is the figure Mrs Theimp must be earning(10%) for the £212 Marriage Allowance.
After being on the phone for an hour the tax office still wanted the £212 from that first year and only the £212 from that first year.

Read my post, above, and then stop using "we". You and your spouse are individuals. You'll not understand MAT whiles you conflate your (plural) tax affairs.

sheramber

Aside from the rights and wrongs of what you have been told to be clear on what has actually happened

If the marriage allowance was taken away form your Wife to pass to you then it would now be due back to her if they have taken it away from you.

So you have an underpayment but she should have an overpayment.

after transfer of marriage allowance 10400 - less 9540 = 860 @ 20% = £172

with MA transferred back to Mrs

10400- 10600 no tax due

so did Mrs T pay £172 tax

and has that been refunded to her?

MrsH78

Hi there. If the answer to this is on here please direct me. I've skimmed bits of it and can't see anything.

So, I was working part time and earned £4455 last year. And that was about the same for the last few years. We have been claiming marriage allowance since 2015 (can't remember if it was backdated - anyway I digress)

I have got a new job. According to my contract, I will be earning £11869.50 a year before NI and pension deductions.

Do I need to inform HMRC of this change now? or wait until next April? OR shall I just cancel it? It seems that its neither here nor there now as if I don't do anything my taxable allowance is less so I'll be taxed on more of my wage - albeit - negligible, while my DH carries on with a higher tax code. So someone's paying that tax somewhere. Or am I totally misunderstanding it.

Any advice about when to remove it would be greatly appreciated.

Thanks