Tax codes and Marriage allowance

ANJ06

Dear Martin and forum members,

Thank you for the opportunity to join you.

I have the following question regarding tax codes for a married couple.

Last year we requested to provide us a marriage allowance as I did not have enough income during lockdown in 2020.

Since February 2021, I have been working on a full-time basis, and my salary is approx. £32,000. This contact will end in the end of June 2022. My current tax code is 1131N. My husband's tax code is 1383M/0, and his annual salary is £25,000.

Please kindly advise whether it is still useful to keep marriage allowance or we pay more taxes.

Many thanks in advance.

Dazed_and_C0nfused

You are paying more tax than you need to.

But if you pay less tax your husband will have to pay more.

Overall one will cancel out the other so all you would achieve by changing things for the current tax year is a more complicated tax position.

But it would be sensible to cancel the application effective from the start of the new tax year and you both then revert to the standard 1257L tax code.

https://www.gov.uk/marriage-allowance/if-your-circumstances-change

NB.  You are both still eligible, there is just no benefit from having Marriage Allowance in place now.

ANJ06

Thank you very much for your comment. As I understand that it is better to change tax codes now and apply for marriage allowance again if we need.

Dazed_and_C0nfused

Certainly keeps things simpler.

And you will be £252 better off next tax year 

Of course your husband will be £252 worse off 

ANJ06

Many thanks for your prompt reply. We think to stop it in April, before the new tax year

Dazed_and_C0nfused

That's what I was referring to.

From 6 April your tax code will revert to 1257L, saving you £252 in tax compared to how.

From 6 April your husband's tax code will also revert to 1257L, meaning he will pay £252 more tax compared to now.

ANJ06

Many thanks. Will taxes codes be changed  automatically in April if I do not do it by myself? There is an option on my HMRC account to stop marriage allowance by clicking a button. 

Dazed_and_C0nfused

No, you are both perfectly eligible to keep Marriage Allowance in place.

HMRC would only change things if one or both of you became higher rate payers or you were no longer married.

Otherwise it is up to you to make any changes.

ANJ06

Thank you very much for your replies. Greatly appreciated. Have a wonderful day!