Tax queries

sheramber

For the current year you won't achieve anything by your wife cancelling the allowance now. ( the person who requested the transfer must cancel it)

If you cancel because of a change of income, the allowance will run until the end of the tax year (5 April).
https://www.gov.uk/marriage-allowance/if-your-circumstances-change

If your income will not be over the limit next year then there is no point in cancelling the marriage transfer allowance.

Timothyayre

Thank you! If I go over the 50K mark will they start taxing a small part of my main monthly income at 40 per cent or would I underpay in this tax year and then pay more next year?

Dazed_and_C0nfused

Timothyayre said:

Thank you! If I go over the 50K mark will they start taxing a small part of my main monthly income at 40 per cent or would I underpay in this tax year and then pay more next year?

It depends on numerous factors.

If you have a main job on say £45k and a second job then you might initially pay 20% (BR tax code) tax on the second job but once it is clear that you annual earnings will be above your basic rate limit (standard amount being £50,270) then you could have a D0 (40%) tax code  at the second job.

Or you might keep BR and have an adjustment in your main tax code.  This normally happens when your main job doesn't take you over your higher rate limit on its own.

But that might not get picked up by HMRC till the new tax year so any tax owed for this tax year would be sorted via your Self Assessment return (if you need to complete one) or HMRC sending you a calculation this time next year.  The most likely end result is that you pay any tax owed via your 2024:25 tax code.  Although of you have to complete a Self Assessment return that is dependent on when you file the return.  Leave it late in the day and you would have to pay HMRC direct.

hxjhxj

I think that the OP should wait until say October once the pay rise is sorted, they can then get a better understanding of their likely position for the whole tax year.  They can then consider what if any changes they need to make.  For example a small donation to a charity to claim gift aid may be a far easier solution than a small one-off pension contribution.

As to the original questions.  If you have only one job the PAYE system will adequately account for income rises and falls around the higher rate band.  I suspect that once you second job ends HMRC will issue a new code making changes, some or all of the estimated additional tax maybe collected this tax year (by adjusting your code) or some or all next year by adjusting next year's code.  Impossible to tell at the moment.

You should open a Personal Tax account with HMRC and ensure that you update the income details whenever they change.

You will only need to submit a tax return if HMRC write and ask you to do one, not all HICBC cases get one.

yorkiechick

hxjhxj said:

You will only need to submit a tax return if HMRC write and ask you to do one, not all HICBC cases get one.

No, but if you are liable for the charge you need to register for self-assessment in order to have one issued. https://www.gov.uk/child-benefit-tax-charge/pay-the-charge

hxjhxj

Registering for SA is optional.  Notifying HMRC is not.  After notification HMRC will decide if they will send you a tax return.

HMRC's rules for registering for SA are their rules, not the statute.