Marriage Allowance

sheramber

julieluvs2shop wrote: »

I got a cheq for £665 after my husband applied to transfer some of his allowance and I thought that’s great! Then my husband gets a tax letter saying he owes £453, how does that work? Why pay me then deduct tax from him, how can he have underpaid when he paid tax every month, seems applying for this has messed things up ��

They paid you because you asked them to reduce his allowances and give them to you.

If he was paying tax then he did not have any unused allowances to give to you so you got some that he had been used to reduce his tax due.

if you leave things as they are they will cocntinue with you paying less tax and him paying more.

dori2o

sheramber wrote: »

These deductions would be what a third party claim would entail.

Either you claimed through a third party website or you have previously used a third party and there is a mandate on your records for repayment to go to them.

This mandate applies until it is cancelled.

That is not completely accurate. The mandate for repayments does not roll forward.

There are 2 types of 'mandate' as you call them.

One is to give authority to deal with an individuals tax affairs and the other is an authority/requirement to send the repayment to a 3rd party.

1st is an authority for a 3rd party to act on an individuals behalf and allows them to contact HMRC and discuss that persons tax affairs and instigate repayment claims. Without this HMRC cannot deal with the 3rd party's claim.

This is usually done by submitting form 64-8, or by providing the authority online via the agent portal, the taxpayer then gets send a unique code which they give to their agent, and they enter this code into the portal to verify the authority.

THIS 64-8/ AUTHORITY TO ACT ON ANOTHERS BEHALF DOES REMAIN UNTIL CANCELLED

This alone however is not enough for repayments to be sent to the agent/3rd party. They require a further authority for this. (This is the 2nd 'mandate').

There are 2 types of this authority

One is a Simple or Bare Nomination. Usually submitted using the form R38.

This is a request to send any refund due for a specified period*** to a 3rd party.

However, this request can be rescinded at any time by the taxpayer, and it is accepted only at HMRC's discretion, and HMRC can choose to issue the payment to the taxpayer if they deem it fit to do so.


The second is a Deed of Assignment. Most 3rd party claims companies use these to prevent the taxpayer from withdrawing the authority....Here's why...

A Deed of Assignment lawfully transfers ownership of any refund due for a specified period*** to the named 3rd party.

In essence it means that the taxpayer no longer owns that money.

HMRC must issue the repayment to the 3rd party as assignment is a lawful transfer of ownership.

The taxpayer can only cancel the Assignment in place for the specified period*** with agreement from the company/3rd party who are the assigned. They will normally only agree to this upon payment of a fee.

*** SPECIFIED PERIOD

These repayment authorities (R37 & Deed of Assignment) must specify which tax years they are applicable to.

In order to be valid they can only apply to tax years where the individuals tax is deemed to have been paid. This only applies at:

a) the end of the tax year
b) the taxpayer is making an in year repayment claim and declares that they will have no further income before the end of the tax year.

These repayment authorities CANNOT be given for future tax years, which also includes the current tax year, unless statement 'b' above applies.

If anyone has had a situation where one of these companies has claimed a refund for a future year, but you have not provided a new authority/signed a new Deed of Assignment, you should contact HMRC immediately and tell them you have not signed a new authority.

dori2o

julieluvs2shop wrote: »

So it will be ok from now on if nothing changes? As I feel I should have just left it. Don’t think I understood it properly when we did it to be honest

As a household you were actually better off in that the refund due was more than the tax underpaid.

This is likely because whilst your husband didn't have an income equal to the personal allowance in some/all of those years, his income was more than the 90% of the allowance he was left with having retrospectively transferred 10% of his full allowance to you.

This is something that officers have been asking to be made clear on the website ever since this policy was introduced, however , these requests continue to be ignored.

unholyangel

polymaff wrote: »

HMRC didn't - and still don't - so why should you?..


As it works out, it is very difficult for a couple to actually lose by activating MAT - but many will find that that T in MAT is just what means - a TRANSFER of funds from one party to the other.

Is transfer actually part of its official name? AIUI, its just marriage allowance (not to be confused with married couples allowance).

Dazed_and_confused wrote: »

What did he expect if he was already paying tax every month?

Applying for Marriage Allowance means you either pay the same amount of tax or more. It can never mean you pay less.

I suspect the poster in question is confusing NIC. Either that or the spouse was on the wrong tax code. Because if he was on the right code, then the only way his balance owing would be less (than the cheque) would be if his earnings fell below the full personal allowance amount for those years.

polymaff

unholyangel wrote: »

Is transfer actually part of its official name? AIUI, its just marriage allowance (not to be confused with married couples allowance).

Marriage Allowance Transfer, MAT, was the working title within HMRC and "Transferable" is the term used in the legislation. Of coursr the legislation expected it to be a true transfer - but, via HMRC's barmy implementation, it rather came off the rails. Hence so many complaining - not the least on MSE - "Oi - the old man's mugged me for 250 quid"!


EDIT: it also differentiates it a bit more from MCA - which many have confused with the abbreviated term Marriage Allowance. Long live TLAs..

unholyangel wrote: »

I suspect the poster in question is confusing NIC. Either that or the spouse was on the wrong tax code. Because if he was on the right code, then the only way his balance owing would be less (than the cheque) would be if his earnings fell below the full personal allowance amount for those years.

On a topic where various sub-threads are running, ambiguous language like that highlighted above is definitely not on. As such, the following comment has between 0 and 100% relevance.

Our experience on here is that HMRC takes the opportunity to piggy-back other coding adjustments when addressing MAT.

unholyangel

polymaff wrote: »

Marriage Allowance Transfer, MAT, was the working title within HMRC and "Transferable" is the term used in the legislation. Of coursr the legislation expected it to be a true transfer - but, via HMRC's barmy implementation, it rather came off the rails. Hence so many complaining - not the least on MSE - "Oi - the old man's mugged me for 250 quid"!


EDIT: it also differentiates it a bit more from MCA - which many have confused with the abbreviated term Marriage Allowance. Long live TLAs..




On a topic where various sub-threads are running, ambiguous language like that highlighted above is definitely not on. As such, the following comment has between 0 and 100% relevance.

Our experience on here is that HMRC takes the opportunity to piggy-back other coding adjustments when addressing MAT.

Their identity isn't pertinent to the point I was putting forth. If the forum were that bothered in how they want the threads to be structured then they would have had it stepped. If they aren't that bothered, why are you?

Nonetheless, that part of my post was responding to D&C specifically. Not making a general comment on the thread.

Dazed_and_confused

To be honest you could have income of £19k, apply for Marriage Allowance and not have any tax to pay. If you have the correct mix of income.

leannepink2303

Hi,

I applied for Marriage Allowance including backdated years. We have received a cheque today but isn't the full amount we expected as we are eligible for all years. A quick calculation suggests we have received all years apart from 2018/2019...could this be because the last tax years amount would be refunded through wages rather than with the previous years via cheque?

Thanks in advance :-)

Dazed_and_confused

No.

It is because it is only just after the end of the tax year and HMRC won't have started reviewing the 2018:19 tax year yet.

The only adjustment to the 2019:20 tax code would be to include Marriage Allowance for 2019:20, not any earlier year(s).

Your spouse can expect any refund due for 2018:19 sometime in the next few months.

As the applicant are you expecting a tax bill? A lot of posters on here seem to apply for all possible years without considering the actual income position for them all.

leannepink2303

Dazed_and_confused wrote: »

No.

It is because it is only just after the end of the tax year and HMRC won't have started reviewing the 2018:19 tax year yet.

The only adjustment to the 2019:20 tax code would be to include Marriage Allowance for 2019:20, not any earlier year(s).

Your spouse can expect any refund due for 2018:19 sometime in the next few months.

As the applicant are you expecting a tax bill? A lot of posters on here seem to apply for all possible years without considering the actual income position for them all.

Ah yes of course that makes sense...thank you.

I have too seen the comments from others about owing tax. I dont expect to receive a tax bill as I haven't worked, therefore, not used any of free allowance since 2012. That said im sure I read about someone receiving a bill in similar circumstances so only time will tell I guess.

Thanks again :-)