Marriage allowance exchange from wife to husband and back

old_dinosaur

Hi. Help required please. New to this pension/tax lark. I transferred my allowance to hubby when Martin first mentioned it a few years ago, but 2 years ago we both retired. My pension pots were above the allowance the month before end of tax year. Hubby's gov pension was well under the allowance but knew he d pay tax once private pension was released. Lots of problems with this in fact now 2 years on and still not received it! Another story there.
Two issues here Dec 22 HMRC issued P800 said I owed £125 for year 2021-22 which is for the first month I received my Gov pension. However as my hubby had my allowance that year which was code1260 I probably wouldn't have needed to pay any tax if I had realised that I should have cancelled my MA.
HMRC surely should have realised I was over the tax allowance threshold by the fact that they have sent me a demand for £125, but no so this year I've cancelled MA as Hubby still has not received pension. Then HMRC sent another letter tax code for 2022-23.still saying I was giving the MA to my hubby, who is still not paying any tax!
Also stated that due to an in year adjustment (how come they can do this but the MA runs until end of tax year) we THINK that you will owe nearly £500 so we will collect this in equal installments so its being taken from my pension since Dec. 22-Apr about £120 deducted each month quite a chunk and getting my tax allowance back would help a lot..
Cheers for any reply.

Dazed_and_C0nfused

Being liable to tax doesn't stop you from being eligible, either as the applicant or recipient.

It's being a higher rate payer which is the key factor.  As you seemingly weren't a higher rate payer then you are still eligible.

Did Marriage Allowance save your husband any tax at all in 2021:22?

sheramber

The only requirement for transferring the marriage allowance is that the person receiving the allowance does not pay higher rate tax.

HMRC do not check whether it is advantage to transfer the allowance. 

Your tax records are separate from your husband's so the person actioning the transfer does as you request and has not sight of your husband's tax position.
The only check done is after the end of the tax year when the computer would highlight if the receiving  partner was liable at higher rate.

If you only  received the second pension in the last month of the tax year HMRC may not have included it in your tax coding for 22/23 which  would the in year adjustment. 

You can check your tax affairs  online in your Personal Tax  Account.

old_dinosaur

Thank you for responses. Not at 40k+ rate. Just need to find out if anyone has swopped MA allowances part way through the year and was able to set the reclaimed1260 against that years tax as the non taxpayer is now the tax payer and visa versa.

Dazed_and_C0nfused

I'm sure you can change it but it might be best to phone HMRC for this particular situation.

8am sharp seems to be the best time to avoid a long wait.

You need to work out the impacts yourself for any previous tax years

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

old_dinosaur

Brilliant thanks. By looking at the year 21-22 seems they've taxed me at the 20% and given me full allowance but then 22-23 they've given my hubby back the allowance! Will be on phone early.