Marriage Allowance

pdbaker

Thanks again for this (& to polymaff as well): yes I fear I have got beyond my rather basic comprehension although it sounds like perhaps if I just assume dividend allowance doesn't exist and I would still be charged at 20% (which is the case from the figures below) then I might still have MAT eligibility??

Some figures with a bit of rounding, and hopefully, as well as for me, just so you might be able to resolve the matter as a hopefully useful example one way or another:

income (from employment & also some royalties): £61k (gross)
charitable giving: £7k (net)
SIPP contribution: £25k (gross: I contributed just over £20k net)
Dividends: £800 (made up from uk dividends, unit trust dividends)

Thanks

Dazed_and_confused wrote: »

He was wrong. But I fear you are getting confused with the dividend income. Even if you are only charged the dividend nil rate (aka Dividend Allowance) this can still prevent you receiving the Marriage Allowance tax credit.

If any part of the dividend nil rate falls within the higher rate band you miss out.

So can you confirm your total taxable income figure and the gross amount of relief at source pension contributions and gross amount of gift aid payments?

And when I said have told HMRC I meant are they taking them into account in your tax calculation, not just have you mentioned them in a phone call.

In fact have you actually received a calculation without the Marriage Allowance credit yet?

pdbaker

Just a quick p.s. as well on your other question to say when I had the phone call with the HMRC adviser I had completed but not submitted my tax return so it was all online ready to submit so he said he would login to take a look: he then told me that me wife wouldn't be eligible to request MAT because it was determined on my gross amount as mentioned earlier. I have now subsequently submitted my tax return (as it happens I guess the MAT even it was eligible, as I understand it, would actually be a case of my wife submitting a request: she doesn't need to complete a tax return).

PV123

Still trying to comprehend how I was duped into believing I was applying for Marriage Allowance directly through Gov.UK??? I went through all the links on Martin's site and ended up at Gov.UK where I had to go through lots of questions. Next thing I know an app form arrived with letter from Marriage Allowance Tax Rebate, I had no reason to suspect a thing as I thought they were working in conjunction with Tax Office, otherwise how did they get my details and know I was applying for the allowance? I returned it and got the allowance but less £167.67. After ringing Tax Office I found out they're a third party agency and the reduction was 3rd party admin and VAT costs! How on earth did THEY get involved? I did NOT contact them? There are no contact details for them, no e-mail address, no phone number. It was only when I wrote to them and they replied that a web site address had suddenly appeared on their letter! Again no contact details can be found on there apart from their address. Even if you search on Google for Marriage Allowance Tax Rebate nothing comes up! Know there have been threads before about this but if you haven't read them DO NOT GET INVOLVED with this agency. If you want to apply for Marriage Allowance do it direct and contact Tax Office on 0300 200 3300

sheramber

PV123 wrote: »

Still trying to comprehend how I was duped into believing I was applying for Marriage Allowance directly through Gov.UK??? I went through all the links on Martin's site and ended up at Gov.UK where I had to go through lots of questions. Next thing I know an app form arrived with letter from Marriage Allowance Tax Rebate, I had no reason to suspect a thing as I thought they were working in conjunction with Tax Office, otherwise how did they get my details and know I was applying for the allowance? I returned it and got the allowance but less £167.67. After ringing Tax Office I found out they're a third party agency and the reduction was 3rd party admin and VAT costs! How on earth did THEY get involved? I did NOT contact them? There are no contact details for them, no e-mail address, no phone number. It was only when I wrote to them and they replied that a web site address had suddenly appeared on their letter! Again no contact details can be found on there apart from their address. Even if you search on Google for Marriage Allowance Tax Rebate nothing comes up! Know there have been threads before about this but if you haven't read them DO NOT GET INVOLVED with this agency. If you want to apply for Marriage Allowance do it direct and contact Tax Office on 0300 200 3300

See post 1567 et seq.

Check with HMRC that no future repayments will go to them, whether you claim through them or not.

pdbaker

Just regards Marriage Allowance eligibility if your gross income is over the higher rate threshold but you make a SIPP or charity contribution: I've had a discussion on the record via twitter now with HMRC guidance and they confirm that it is their interpretation that they need only look at your gross income in determining that you are not eligible: so for the theoretical example of a 2018/19 £50k gross employ + £100 dividends + £100 savings say alongside a £10k SIPP or charitable contribution they rule you are definitely not eligible.

There reasoning seems to be (although not very clear on replies) that you are still liable to higher rate tax, it is just that 'relief' is awarded/refunded to you for your other contributions. I can see this logic to an extent but it still seems a bit odd if you check the official eligibility rules that they also copied me in on: My tax return calculation statement from them for instance seems to clearly show that I have no liability for higher rate tax because my basic rate limit was extended by £x because of the SIPP/charity contributions and all income is shown as taxed at 20%.

Anyway make of it what you will: any thoughts received with interest - thank you to others for their earlier comments: visit the twitter HMRCCustomers page and then /status/ 1155798761395953664 if you want to read the interesting exchange.

pdbaker

Just a bit of final feedback for the record on this ongoing question of MTA eligibility based on the higher earner's income:

* in the summer I engaged with written correspondence with HMRC who told me that someone was not eligible for MTA as soon as their gross income passed the standard higher rate threshold (currently £50k) regardless of any pension or gift aid contributions they might make.

* I then passed this on to my MP (Lucy Frazer) for a look since this looked confusing since it was at odds with how say income is measured for child benefit eligibility checks

* My MP kindly followed it up with the treasury

* I have since received an apology and clarification from the HMRC who have now stated in writing to me "your total income was above the higher rate limit for that year however due to pension payments & gift aid your basic rate band was increased sufficiently enough to not be liable to higher rate income tax. This would indicate you would be eligible for Marriage Allowance Transfer as the the recipient as long as all other criteria are met. I would like to take this opportunity to apologise for the incorrect advice you were given"

So crazy that it has taken so long to resolve but given so many people make pension and gift aid contributions, there are probably a lot of people out there who are eligible for MTA who don't realise it. I have followed back up with my MP to ask if the gov.uk guidance page on MTA might make this clear as it does for child benefit and that also their MTA eligibility calculator might be updated to also make this clear.

Thanks again to polymaff & dazed for their prior advice on the matter.

Consumerist

Plus 1 for the little guy. Well done.

polymaff

Thanks for the follow-up. Credit to your MP, too. If you ever end up with an MP like mine, write to HMT directly. I've done this and HMT have diligently slapped two of their "agencies" about and achieved the sort of written acceptance that the agency got it wrong that you have received.


I bet you'll frame that letter...:)

Hallucyn8

Hi

I've searched this thread and not seen this covered already so just wondering if anyone has any advise that can help me.

I have been the recipient of marriage tax allowance from my wife for several years. We separated early in 2018 and are now in the final stages of getting divorced and ready to apply for the decree absolute. During this time I have continued to receive the marriage tax allowance.

From looking on the HMRC website it appears that either me or my soon-to-be ex-wife can cancel the allowance but from what I have read there and elsewhere it seems like if I am the one to cancel it I will have to pay back all the allowance for this tax year but if she cancels it she has the choice of whether to backdate it and make me pay it back or allow it to continue until the end of this tax year.

I have also seen mention elsewhere that it will automatically cancel at the end of the tax year once we are divorced but I can't see this mentioned on the HMRC website.

The relationship between us is not great and I can imagine that if she has the choice of making me pay back the allowance for this year she will. If it does automatically cancel at the end of the tax year and I won't have to pay anything back then I'm probably better off not mentioning it. She doesn't currently work and I don't think it will have even occurred to her that I am still receiving it and that she needs to cancel it.

What I don't want to end up happening though is leaving it, it not cancelling and then end up having to pay even more back than if I just cancelled it myself now (or got her to do it).

I'm not interested in, or trying, to get more than I am entitled to and want to remain the right side of the law it just doesn't seem fair that my ex has the opportunity to hurt me financially just out of spite.

I should just mention that we have sorted the divorce out between ourselves without using solicitors so can't ask them for advice which would probably be the most logical option if it was open to me.

polymaff

I've seen the same opinions as you have, but the legislation says:

(4)An election may be withdrawn only by a notice given by the individual by whom the election was made.


also, note:

(7)The withdrawal of an election under subsection (4) has effect for the tax year in which the notice is given if—

(a)in a case where the individual concerned met the condition in section 55C(1)(a) by reason of being married, the marriage has come to an end in that tax year, or

(b)in a case where the individual concerned met the condition in section 55C(1)(a) by reason of being in a civil partnership, the civil partnership has come to an end in that tax year.

(8)For the purposes of subsection (7)(a), a marriage comes to an end if any of the following is made in respect of it—

(a)a decree absolute of divorce, a decree of nullity of marriage or a decree of judicial separation, or

(b)in Scotland, a decree of divorce, a declarator of nullity or a decree of separation.

(9)For the purposes of subsection (7)(b), a civil partnership comes to an end if any of the following is made in respect of it—

(a)a dissolution order or nullity order, which has been made final,

(b)a separation order, or

(c)in Scotland, a decree of dissolution, a declarator of nullity or a decree of separation.

(10)A notice under subsection (4) must—

(a)be given to an officer of Revenue and Customs, and

(b)must be in the form specified by the Commissioners for Her Majesty's Revenue and Customs.