Marriage Allowance

kitty5 · 16 March 2016 at 9:36PM

Consumerist wrote: »

By my reckoning, using your numbers, your gross taxable income for the year is £10,600 + £625 - £2,500 = £8,725 on which you should not pay tax. (I've assumed the £500 is a net payment.)

As you say, your husband will be a basic-rate taxpayer and so will meet the criteria to receive MA.

In any event, if in doubt just apply. If you don't qualify HMRC will soon tell you or claim the tax back again.

To say thanks, you only have to click a button; is it really too much trouble?

Thank you. I will apply and see what happens.
As you say, they can only take it back. Nothing to lose.

JCJ1944 · 19 March 2016 at 3:58PM

Hi,

Having recently read the MSE article on this subject, I went online and applied, and was accepted.

I don't pay tax but my husband does (at the basic rate), so it seemed like a great idea. However, receiving my pension statement for March, a tax deduction was listed for £98 ( from my monthly Civil Service person of £392), which seems a huge amount. Especially considering I wasn't paying any tax at all before.

Can anyone confirm if this is correct, and will this be happening every month from now on ?

Many thanks in advance

Consumerist · 19 March 2016 at 5:08PM

JCJ1944 wrote: »

. . . I don't pay tax but my husband does (at the basic rate), so it seemed like a great idea. However, receiving my pension statement for March, a tax deduction was listed for £98 ( from my monthly Civil Service person of £392), which seems a huge amount. Especially considering I wasn't paying any tax at all before. Can anyone confirm if this is correct, and will this be happening every month from now on ?

The pension you mention implies a pension of ca. £4,700 pa which is well below the normal Personal Allowance. Unless you have other taxable income, the tax deduction does seem entirely incorrect.

What tax code have they used? It should be based on a Personal Allowance of £10,600 - £1,060 (MA) = £9,540 so a tax code of 954M.

If the tax code used is correct then it seems likely that your pension provider has made a mistake.

Dazed_and_confused · 19 March 2016 at 5:36PM

If there's a civil service pension then maybe there's a State Retirement Pension as well which could affect both the tax code and amount of tax due after the Marriage Allowance takes effect?
Impossible to say though really without a bit more info from the OP

I guess its possible to not pay tax before applying for Marriage Allowance but have to pay some after applying. If hubby is £212 better off and you've had to pay £98 then your still £114 better off overall (as a married couple)

Consumerist · 19 March 2016 at 8:16PM

Dazed_and_confused wrote: »

. . . I guess its possible to not pay tax before applying for Marriage Allowance but have to pay some after applying. If hubby is £212 better off and you've had to pay £98 then your still £114 better off overall (as a married couple)

Quite so.

A full year of a full State Pension is about £6,800 so the CS pension would have taken it over the Personal Allowance and some tax would have been paid, even before the MA reduced the tax code further.

We really need to know what tax code was applied to the CS pension before the MA reduction.

You make the good point that, as a couple, they are still better off having the MA.

javajim · 20 March 2016 at 9:39AM

Thanks for the Marriage Allowance advice.
This morning we applied for the allowance, which is so easy to complete and received confirmation in minutes.

JCJ1944 · 20 March 2016 at 2:31PM

Thanks all for your correspondence.

My tax code for 15/16 was 420N and for 16/17 is 442N

My state pension is £5337 per year and my civil service pension is £4705 per year. I have no other income. I understood that I might be paying a small amount of tax as a result of the transfer, but £98 a month can never be correct, surely ?

Dazed_and_confused · 20 March 2016 at 2:49PM

£98 looks to roughly the tax due for the whole year, which has been taken in one month for some reason.

Darksparkle · 20 March 2016 at 2:57PM

Dazed_and_confused wrote: »

£98 looks to roughly the tax due for the whole year, which has been taken in one month for some reason.

Probably because it's the last month of the year.

molerat · 20 March 2016 at 3:00PM

It is not £98 for one month it is £98 for the year since April, you would have been paying roughly £8.20 a month tax if you had the code all year. Your tax allowance prior to giving 10% away was £5260 against an income of £4705 so no tax to pay. Now you have an allowance of £4200 against that income of £4705 so tax is due on £505 for the year, roughly £101 and your OH gets £212 extra.