Marriage Allowance

ninetofive

It's amazing isn't it. I have just had some of my wife's tax allowance assigned to me so my tax code has gone up to 1304M. That's worth about £240 I believe. Oh but hang on. We are eligible for housing benefit so our council have cut our benefit award by 65p per £. To be fair, we are very close to the point of not being eligible for HB which will be a breakthrough and a relief as any overtime I do will actually be worthwhile. It just seems a bit, well, wrong. Wasn't this marriage allowance brought in to give lower income families a boost?

Dazed_and_confused

Wasn't this marriage allowance brought in to give lower income families a boost?

I don't remember lower income families being a justification for it. I think it was recognising Marriage that was the real driver.

And it isn't just for lower income families. Really low income families cannot benefit as neither would be paying tax so the Marriage Allowance tax credit you are getting wouldn't save them anything.

And in 2019:20 (when it will save you £250) you could have one person with (the right sort of) taxable income of c£19k and another with taxable income of £50k and they would be eligible to apply and benefit from it.

bfrc

hi i applied for marriage allowance back date and received a cheque for £660 up to tax year 2018
i found the process very easy to do we also recieved £50 refund for my wife overpayment from 2016
all thanks to mse and watching martin on telly

cwtch39

I saw on the Martin Lewis programme info on the Marriage Allowance.

I retired in 2015, two years before my husband. I rang HMRC on 0300 200 3300 and followed the options for Marriage Allowance - it was worth the twenty minute holding time!

I had both our P60's to hand and was told he would be sent out a calculation to peruse and possibly agree to before any payment may be made - not two weeks later, a cheque turned up with him today for £662!

It had a slight effect on me by a letter also arriving, telling me I owe £24, but that's peanuts in the whole scheme of things.

Thanks Martin - I wouldn't have known anything if I hadn't watched the programme!:j

Dazed_and_confused

£662 looks like the tax credit due for the three years 2015:16, 2016:17 and 2017:18.

So if you applied for the current tax year he will probably be due roughly another £238 later this summer when HMRC review the current tax year.

Plus a revised tax code for the 2019:20 tax year so paying £20.83/month less from April as well.

With a bit of luck he will give you the money to pay your tax bill

wannaretireearly

Hi, I've read back through some of this thread and can't see the answer. Apologies if i have missed it. I only work a few hours/earn a few thousand a year whilst hubby works mega hours/earns enough to mean he would pay 40% tax if he didn't salary sacrifice into his pension scheme. Does the marriage allowance mean that ...
£12,500 + £1,250 = £13750 tax free
£37,500 taxed at 20%
anything above taxed at 40%
Therefore meaning he could earn £51,500 before he is a higher rate tax payer?
I can't find anything on the Gov website to clarify this.
Also, he works for an employer and is PAYE. Apart from having to pay tax for medical insurance he gets (not optional) his wages are straightforward yet we have had TWO overpayment requests from HMRC for tax year 2017-18! I am worried he will get one every year and don't understand why (sorry if i shouldn't ask this here but feel some of you may know)
Thanks for reading

Konya

Hi all hope you are all well.

Just a quick question to ask all of you gurus if you don't mind?
I have had a look and Martin Lewis doesn't quite cover what I need answering, he says "You do NOT have to apply every year. Your personal allowance will transfer automatically to your partner until one of you cancels the marriage allowance or you inform HMRC that your circumstances have changed, eg, because of divorce, employment pushing you into a higher-rate tax threshold or death."

Please can anyone help?

I do not work, look after my disabled Mum (unpaid, no benefits or anything) so a few years ago we successfully applied for the marriage allowance and all was well in the world.
Last year we had a letter telling us my Husband had now underpaid on his tax because after working so much overtime he had gone over the threshold. Fair enough and his tax code changed and he is now paying off this extra tax each month in his wages.

My question is, now the threshold has gone up, if my Husband stays under it do HMRC relist us on the Marriage Allowance scheme automatically or do I need to reapply?

Thanks so much all of you.
Regards. :-)

Dazed_and_confused

My question is, now the threshold has gone up, if my Husband stays under it do HMRC relist us on the Marriage Allowance scheme automatically or do I need to reapply?

You would have to apply again. But from the first tax year he wasn't a higher rate payer. So if we higher rate only in 2017:18 then apply for 2018:19.

If you do it in the next couple of days it should continue on into the 2019:20 tax year starting in a few days.

Dazed_and_confused

£12,500 + £1,250 = £13750 tax free

No. You applying for Marriage Allowance does not entitle your husband to any extra Personal Allowance.

He gets a tax reduction (worth £250 in 2019:20 tax year) off whatever his tax liability is. So if he earned £51,500 (the pay on his P60 and company benefit) he would be a higher rate payer.

But if he contributed to a personal pension (salary sacrifice doesn't count because that's not him contributing, it just gives a lower P60 pay figure because he is agreeing to give up some pay in return for his employer paying into a pension for him) then that normally increases the amount of basic rate tax payable. Which in turn reduces the amount of higher rate tax payable.

Potentially meaning he is a basic rate payer again.

Unless you provide some details no one can say why he owes tax. Might be connected to the company benefit. Might be he's lost his Marriage Allowance because he was a higher rate payer. But all guesswork without some actual detail.

Konya

Dazed_and_confused wrote: »

You would have to apply again. But from the first tax year he wasn't a higher rate payer. So if we higher rate only in 2017:18 then apply for 2018:19.

If you do it in the next couple of days it should continue on into the 2019:20 tax year starting in a few days.

You are an absolute star, thank you so very much for your answer, really appreciate it.
All the best.