Marriage Allowance

Consumerist

Nediachick wrote: »

I’ve just submitted the government form to transfer my allowance to my husband (as the article suggested), and ticked the boxes to backdate any rebates due.
Have just had an email from HMRC to say that his tax bill this year (2018/2019) has been adjusted, and he will also get a rebate of £345.
I’m not being greedy, but I thought it would be more than that as, looking at how much could be claimed, it was well over £200 for each year, so thought it would be over £600?
Am I missing something?

According to the article the amounts involved are:

• 2015/16 - £212
• 2016/17 - £220
• 2017/18 - £230
• 2018/19 - £238

So for previous years that should total £662 assuming you qualified in all those years. Is it possible your husband owes tax on other taxible income received ?

Nevermind309

Talking to a couple of fairly clued up (I think) people at work about this, one says that it is really only beneficial if the high earner is earning a lot of money (under the first threshold £42k obviously) is that right?

I am just trying to work out if it is worth me doing, also does it mean I will pay less tax on my monthly salary and wary of a 'change in tax code' ..

polymaff

Nevermind309 wrote: »

Talking to a couple of fairly clued up (I think) people at work about this, one says that it is really only beneficial if the high earner is earning a lot of money (under the first threshold £42k obviously) is that right?

I am just trying to work out if it is worth me doing, also does it mean I will pay less tax on my monthly salary and wary of a 'change in tax code' ..

That is bad advice. Virtually no couple* eligible for MAT will, as a couple, lose.

To work out how much the couple will gain, work out how much of the one who elects for MAT's income will be shifted back into tax, then how much tax that represents and subtract that from 20% of that year's MAT (i.e. 20% of £1,190 in 2018-19).

*Possibly a few Scots.

Consumerist

Nevermind309 wrote: »

Talking to a couple of fairly clued up (I think) people at work about this, one says that it is really only beneficial if the high earner is earning a lot of money (under the first threshold £42k obviously) is that right?
I am just trying to work out if it is worth me doing, also does it mean I will pay less tax on my monthly salary and wary of a 'change in tax code' ..

Assuming your spouse would claim (i.e.would transfer the allowance to you) - then you will get the full benefit from Marriage Allowance if your spouse has less than (in 2018/19) £11,850 - £1,190 = £10,660 of taxable income and you have more than £11,850 + £1,190 = £13,040 of taxable income. (The allowance was rounded up to £1,190 from £1,185 which is 10% of the standard Personal Allowance)

As polymaff has suggested above, you shouldn't lose out as couple (give or take minor tax-code rounding errors) if the allowance is claimed - but make sure the correct person (non-taxpayer) makes the claim.

Edit
If you qualified in previous years then HMRC will make a cash refund but for the current year your tax code will be adjusted to give you the allowance over the tax year. Since this tax year is nearly over, you will get a refund in your pay if you claim before the 2018/19 cut-off date - which is imminent.

Dazed_and_confused

Have just had an email from HMRC to say that his tax bill this year (2018/2019) has been adjusted, and he will also get a rebate of £345.

I’m not being greedy, but I thought it would be more than that as, looking at how much could be claimed, it was well over £200 for each year, so thought it would be over £600?

Am I missing something?

How has he got a tax bill for this year when it hasn't even finished yet? Or do you mean his tax code?

Do you know your spouse's tax position for all the previous tax years concerned? He could owe some money, say £255, which has now become a refund of £345 so an overall change of £600.

Unless you can provide more detail it is impossible to know what has happened and if the £345 is correct or not.

Dazed_and_confused

Talking to a couple of fairly clued up (I think) people at work about this, one says that it is really only beneficial if the high earner is earning a lot of money (under the first threshold £42k obviously) is that right?

They might be "clued up" on something but it's not Marriage Allowance.

There is no "threshold" for a start. You could be earning £60k and still be eligible to receive (and benefit from) Marriage Allowance. It all depends on each person's individual circumstances.

djonas

Hello
I am the tax payer and my annual salary is just under £46,350.
However, in June I also get an additional bonus which is paid in my salary.
Does that count making me ineligible?
Thanks

Consumerist

djonas wrote: »

Hello
I am the tax payer and my annual salary is just under £46,350.
However, in June I also get an additional bonus which is paid in my salary.
Does that count making me ineligible?
Thanks

A bonus in June 2019 will come into the 2019/20 tax year so will not affect your income in this tax year. Don't forget it's not just your salary but your total taxable income that is used in the reckoning so check all sources of income to see if you will qualify this year.

In general, I would suggest that if you are in doubt, claim anyway. As a couple you you shouldn't lose anything beyond minor tax-code rounding errors.

Even if you don't qualify in this year, HMRC will check to see whether you qualified in the last 4 years and backdate any claim. Don't forget that the non-taxpayer should make the claim.

polymaff

Consumerist wrote: »

Don't forget that the non-taxpayer should make the claim.

NO! Don't propagate this capital error. For UK tax payers both parties to an MAT may be tax-payers. In such circumstances it is usually the party with the lowest taxable income who applies - but even that is not always so.

Consumerist

polymaff wrote: »

NO! Don't propagate this capital error. For UK tax payers both parties to an MAT may be tax-payers. In such circumstances it is usually the party with the lowest taxable income who applies - but even that is not always so.

Well, in my book anyone who already pays tax and then applies for Marriage Allowance will simply pay more tax (£238 in 2018/19). It's then for the higher earner to recoup that loss by the other party.

It is possible that polymaff will come along soon to explain how this will work out as a gain for the couple.