Tax query

Cacran

Being a married person, I thought I would look into applying for Marriage Allowance. Neither me or my husband earn over £11,000 per year. He gets a pension from his ex employer, I get a wage(part time) a pension from an ex employment and in recent months claim the lower level PIP benefit, having a debilitating illness.
I am really confused.
Does it mean that because we don't pay tax, there is no point in claiming the Marriage Allowance, which would allow us to benefit only if our income increased to over £11,000?
I am also confused about our savings. We have a number of Isa's. I am right in the understanding that I do not have to count the interest on those accounts as income?
We have some other accounts that are now, not taxed at source. Do I have to add the interest gained on those, to our income amount (wage, benefit and pensions)?to work out our actual yearly income?
Will the tax office already know that on top of my earnings, I get a small pension and PIP benefit, because I have never declared them, having not being asked?
Should I be doing a self assessment form each year. I thought they were for people in business but am starting to wonder.
As I get older, I find it difficult keeping up with all the changes.

rs65

Cacran wrote: »

As I get older, I find it difficult keeping up with all the changes.

Should this be in the tax forum rather than the insurance one?

Cacran

I didn't even know I had chosen a forum, what am I like?

Aretnap

You're right about the marriage allowance not helping you. It's a way for some married coupes to reduce the amount of tax they pay by transferring some of the lower earner's personal allowance to the higher earner. However if you both earn less than the personal allowance of £11000 then you pay no income tax anyway, so you can't reduce it further.

Interest from ISAs is entirely tax-free so doesn't count as income for tax purposes. Interest from other accounts only counts, so only has to be declared, if it amounts to more than £1000/year (for all your accounts combined).

PIP is also tax-free so doesn't count towards your income for tax purposes. Your pension provider should be reporting your pension payments to HMRC so you don't necessarily have to do a tax return; however it's worth checking that it's being taxed (or rather, not taxed) correctly. I'm told that when you have income from multiple sources you sometimes end up having too much tax deducted at source - someone on the cutting tax board should be able to help you check if this is the case.