Marriage Allowance

polymaff

Not really.

Why the concern about PAYE code stability?

When Personal Allowances change, PAYE codes (if you have one) change.

Dazed_and_confused

It's doable but in two stages.

If you apply now for 2018:19 the Marriage Allowance will continue into the 2019:20 tax year. Which doesn't seem to be what you want.

But that doesn't happen if you apply for tax years that have finished.

So step 1

Check which years out of 2015:16, 2016:17 and 2017:18 are worth applying for (you are probably eligible for all three but it may not be beneficial for you (as a couple) to apply for.Marriage Allowance). It may be 2015:16 is not worth applying and 2017:18 definitely is worth applying (you haven't told us your total taxable income but I'm presuming it is minimal)
2016:17 will also depend on your total taxable income so how much you taxable income to November 2016 will have a large bearing on this.

You can apply for these years now and this won't have any impact on your (or your spouses tax code) going forward.

Step 2
Wait until after 6 April 2019 and if beneficial for you to do so then apply for 2018:19. As this tax year will have then ended HMRC won't assume you want to carry on with Marriage Allowance for later tax year.

Dazed_and_confused

who earns beneath the ~£46k

This really isn't of any relevance. It is what tax rate he pays that matters. He could, in certain circumstances, earn £60k and still be able to receive Marriage Allowance.

polymaff

Dazed_and_confused wrote: »

This really isn't of any relevance. It is what tax rate he pays that matters. He could, in certain circumstances, earn £60k and still be able to receive Marriage Allowance.

It is whether he is classified as a higher rate taxpayer that matters.

Dazed_and_confused

It is whether he is classified as a higher rate taxpayer that matters.

True. Think I've lost the will to explain the dividend quirk

zagfles

Dazed_and_confused wrote: »

True. Think I've lost the will to explain the dividend quirk

Interest too - as discussed earlier in the thread, if you earn just under the HRT threshold eg £46300 and you have bank interest eg £100 which is well within the PSA, you will be classed as a higher rate taxpayer and so won't be eligible to receive the marriage allowance transfer. Despite not paying any higher rate tax.

zagfles

Can anyone explain this - not sure if it's anything to do with MAT.

Wife has employment income about £10k so transfers MA to husband.

Wife also earns around £300 interest from regular savers.

Tax code was 1066N, all looked good.

Then HMRC were notified by the banks of the interest last year, and assumed the same interest this year. They reduce the tax free amount in the tax code by £300 giving a tax code of 1036N.

Why? No tax will be due on the interest, it's well within the PSA and also the 0% starting rate. No tax due from previous years. So why have HMRC changed the tax code based on expected interest which is tax free (or taxed at 0% for the pedants)?

Probably won't make any difference, but if she does overtime and earns say £10500 then she'll pay tax when none is due.

polymaff

Whoa! - we're charging into the quicksand of obscure detail.

Dazed_and_confused

Interest too

Are you sure? As I understood it if you were liable at higher rates or, if it weren't for the dividend (allowance) nil rate, would be liable at higher rate then you are ineligible.

But the same rule doesn't apply to the savings (allowance) nil rate.

polymaff

zagfles wrote: »

Can anyone explain this - not sure if it's anything to do with MAT.

Wife has employment income about £10k so transfers MA to husband.

Wife also earns around £300 interest from regular savers.

Tax code was 1066N, all looked good.

Then HMRC were notified by the banks of the interest last year, and assumed the same interest this year. They reduce the tax free amount in the tax code by £300 giving a tax code of 1036N.

Why? No tax will be due on the interest, it's well within the PSA and also the 0% starting rate. No tax due from previous years. So why have HMRC changed the tax code based on expected interest which is tax free (or taxed at 0% for the pedants)?

Probably won't make any difference, but if she does overtime and earns say £10500 then she'll pay tax when none is due.

I wonder if this is the new "stealth" Payments on Account going wrong?

I, personally, experienced HMRC trying to tax savings interest twice. They backed off when I challenged them.

This is, maybe, the new MAT-type scandal - i.e. HMRC trying to pass off something they don't understand themselves - hoping that they'll get away with it.