Marriage Allowance

Dazed_and_confused

OK, it's academic so I won't quibble, but I'd have expected the £4 PAYE bands to apply the same in both directions, net zero.

Most people paid under PAYE owe tax at the end of the year due to how the tax code and tax table calculations are performed. But often HMRC will ignore it as it's a very small amount.

If you need a calculation from HMRC they will perform an accurate calculation so that small amount owed comes into play. So you (using 2015:16 as an example) might owe £212 from applying for Marriage Allowance plus the c£2 you underpaid in the first place. Total owed c£214.

Your spouse then gets a tax credit* off her tax liability worth £212 bit she was also underpaid c£2 so her net refund is c£210.

Between you you have lost c£4.

*Marriage Allowance doesn't entitle you to any additional Personal Allowance it gives you a tax credit off your tax liability.

company share scheme dividend below the £2000 threshold.

There is no "threshold" or allowance for dividends. They are all taxable however in the current tax year the first £2,000 gets taxed at 0%. For a small number of people this actually increases their overall tax liability and it can make some people ineligible for Marriage Allowance (you have to be close to the higher rate threshold for that to happen).

If you check your Self Assessment calculation you will see how the dividend income is taxed.

Veryskint

Hi can anyone advise - we have had the marriage allowance working for a few years, no problem, but just done our tax returns for 31.3.19 and I see the £1190 added to my tax calculations but not deducted from my husbands. Bit of a swizz.
Any idea why? Is it because I earned too much? I earned just under the single persons allowance but had £2600 of dividends on top of that as well.
I have looked and looked and can't see how to fix this.
Thanks for any help anyone can offer.

Dazed_and_confused

You can't "fix" it. Your husband files his return and HMRC then include it in the calculation.

If you aren't a higher rate payer (and your spouse isn't) then Marriage Allowance is still due.

Veryskint

He has filed his return today but it is not in the calculation. I have filed mine and it is in the calculation (making my tax bill higher). I need to cancel it as I am earning more now, but couldn't work out how to do it.
Will they just cancel it when they realise I have earned too much?
Thank you

polymaff

Veryskint wrote: »

Hi can anyone advise - we have had the marriage allowance working for a few years, no problem, but just done our tax returns for 31.3.19 and I see the £1190 added to my tax calculations but not deducted from my husbands. Bit of a swizz.
Any idea why? Is it because I earned too much? I earned just under the single persons allowance but had £2600 of dividends on top of that as well.
I have looked and looked and can't see how to fix this.
Thanks for any help anyone can offer.

You're muddled. First, the personal return is made up to 5th April - inclusive. Second, you've never seen otherwise than you've, rather muddledly, described. The eligible beneficiary never sees anything different in his assessment - just in his tax account.


Thirdly, the eligibility has nothing to do with your personal allowance.

Dazed_and_confused

Your husband needs to wait a little and check it it say a week. His calculation should then show the Marriage Allowance tax credit.

HMRC would only cancel it if either of you were no longer eligible for it.

Husband and wife both earning £40,000 are eligible for Marriage Allowance.

You are best cancelling it by contacting HMRC now and asking them to stop it from the start of the next tax year (2020:21). Unless your husband won't pay at least £250 in the current tax year then it's different.

polymaff

Veryskint wrote: »

He has filed his return today but it is not in the calculation. I have filed mine and it is in the calculation (making my tax bill higher). I need to cancel it as I am earning more now, but couldn't work out how to do it.
Will they just cancel it when they realise I have earned too much?
Thank you

Do nothing. From what you describe (albeit, muddledly) you will not lose due to electing for MAT.

Veryskint

Thanks all. It used to show in his tax calcs, so I assume it will pop up in his in a week or so, or disappear from mine.

Tinyshoes

Another one here where the marriage allowance is not showing on husbands tax return for 2018/19, he has only worked PAYE for that year and no self employment but it is showing a 3 figure tax bill. A quick calculation on my part show possibly a £2 short fall on his tax bill can only assume it is the missing MA that is causing the bigger underpayment showing.

He has submitted his tax return for now and will have to ring them in the new year before paying.

I have not worked at all for years and since claiming MA it has automatically included in his calculations except the first year I claimed it. I have never filled in a Self assessment myself as have never needed to I hope this won't be needed from now on.

Would be interested to hear how this has been resolved for others.

Dazed_and_confused

If you have made a continuous* claim then it will be included once his return is processed by HMRC.

*this is where you applied for a particular tax year during the course of that tax year. It then continues until either of you change things. If you apply for a tax year after it has ended then the application only applies to that one year.

I have never filled in a Self assessment myself as have never needed to I hope this won't be needed from now on

Marriage Allowance is not in itself a reason why a Self Assessment return would be needed.