A simple, visual model of 2016/17

EnglishMohican

polymaff wrote: »

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https://www.gov.uk/government/publications/self-assessment-technical-specifications-2017-individual-returns
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It might be simplest if you note that nothing can increase the Personal Allowance.

As the URL almost says, this is an instruction to people writing software intended to calculate an individuals tax due including all possible extremes.

This appears to be a long standing document that gets updated at each budget and many times in between. The date of this version is Dec 2016.

The calculations in this document are quite clear. The person giving the MAT has their Personal Allowance figure reduced. The person receiving the MAT does not have their Personal Allowance figure increased - instead a credit against tax is allowed. However, polymaff's statement above is not quite correct as the Personal Allowance can be increased if one receives a Blind Persons Allowance or a transfer of a Blind Persons Allowance from a spouse.
It would be relatively trivial to modify the software to specifically increase the Personal Allowance by the MAT but that is not what this software does.

On the other hand, I have just been onto my Personal Tax Account and they specifically list the basic Personal Allowance, the amount of MAT and then add them together to give a Total Tax Free Allowance. That seems to be different to the Software specifications way of doing things.

We really need something closer to the Treasury and the Red Book that indicates whether Government intended to fool people like me by talking about "transfer of Personal Allowance" when that is not what they wanted implemented or whether the software specification is simply wrong. Polymaff seems able to quote examples where it is wrong - perhaps this is another one - or maybe Government is borderline dishonest?

polymaff

EnglishMohican wrote: »

As the URL almost says, this is an instruction to people writing software intended to calculate an individuals tax due including all possible extremes.

This appears to be a long standing document that gets updated at each budget and many times in between. The date of this version is Dec 2016.

The calculations in this document are quite clear. The person giving the MAT has their Personal Allowance figure reduced. The person receiving the MAT does not have their Personal Allowance figure increased - instead a credit against tax is allowed. However, polymaff's statement above is not quite correct as the Personal Allowance can be increased if one receives a Blind Persons Allowance or a transfer of a Blind Persons Allowance from a spouse.
It would be relatively trivial to modify the software to specifically increase the Personal Allowance by the MAT but that is not what this software does.

On the other hand, I have just been onto my Personal Tax Account and they specifically list the basic Personal Allowance, the amount of MAT and then add them together to give a Total Tax Free Allowance. That seems to be different to the Software specifications way of doing things.

We really need something closer to the Treasury and the Red Book that indicates whether Government intended to fool people like me by talking about "transfer of Personal Allowance" when that is not what they wanted implemented or whether the software specification is simply wrong. Polymaff seems able to quote examples where it is wrong - perhaps this is another one - or maybe Government is borderline dishonest?

Thought that you'd pick on "my error" of thinking that a Personal Allowance plus some other allowance is still a Personal Allowance. More gobbledegook. So much easier than to admit that you've been misinformed thoughout this conversation.

The word "dishonest" is probably too strong. Incompetent is probably the better choice - maybe careless, too. I've no evidence of HMRC setting out to mislead - though they are often reckless. It is, just like many Government Agencies, full of people who have no idea how things actually work. What is worse is that these people are often the trainers of others. Certainly, much of what appears in the "user-friendy" bits of GOV.UK - like the one you quoted - are just wrong. I read the legislation, correspond with the best-informed employees of HMRC and study the sort of documentation that they produce. Then I write - thoughtfully.