Cancelled Marriage Tax Too Late - Will I get a bill?

inwortle

Hi, 
For the past few years my wife and I have been using the marriage tax allowance, while she was studying. Last year, I tried to cancel this after the new tax year started, as she had started work. Only then did I find out that you can't cancel it during the year, and the tax code continues until the next tax year. So I've saved money, expecting a bill this year.
I've just got my first payslip of the tax year, and the marriage tax allowance is still on there! Now I have gone online and cancelled it, but that won't come into place until April 2026 now. I'm not sure what I did last year, when I thought I'd cancelled it - evidently not the right thing and I have no evidence that I can find that it happened. 

Basically, will I get a bill for two years next year? And how is this so easy to do - don't they check? I could have forgotten and continued to get the allowance forever, as far as I can see!

Dazed_and_C0nfused

inwortle said:

Hi, 
For the past few years my wife and I have been using the marriage tax allowance, while she was studying. Last year, I tried to cancel this after the new tax year started, as she had started work. Only then did I find out that you can't cancel it during the year, and the tax code continues until the next tax year. So I've saved money, expecting a bill this year.
I've just got my first payslip of the tax year, and the marriage tax allowance is still on there! Now I have gone online and cancelled it, but that won't come into place until April 2026 now. I'm not sure what I did last year, when I thought I'd cancelled it - evidently not the right thing and I have no evidence that I can find that it happened. 

Basically, will I get a bill for two years next year? And how is this so easy to do - don't they check? I could have forgotten and continued to get the allowance forever, as far as I can see!

Why do you think you will get a bill?

Are either of you liable to higher rate tax, or expecting to be liable to higher rate tax in either the 2024-25 or 2025-26 tax years?

I suspect you have misunderstood the rules for Marriage Allowance.  A couple both earning say £40k are eligible for Marriage Allowance.  Did you think some other rules applied?

Also, why are you trying to cancel this?  Surely it is your wife who should be cancelling it.  Have you bothered looking at the guidance on gov.uk 🤔

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

eskbanker

The calculation of both spouses' tax liabilities will incorporate marriage allowance for both 2024/25 and 2025/26, but only as and when such calculations are routinely made, i.e. there's no 'bill for two years' involved.

inwortle

Ok, thanks! Sounds like I'm worrying unnecessarily. I may have misunderstood exactly how it's working. As I understood it, we were eligible because my wife, as a student, wasn't paying tax, so was transferring some of her allowance to me. 
But what I'm hearing is that didn't make us eligible, it just made it profitable for us. Whereas now, as she's working and paying tax, she's still transferring some of her tax allowance to me, but that just means she pays more tax and I pay less, right? Making it make no difference to the household overall. Hence why it doesn't actually matter and HMRC aren't pounding down my door for their £200. 

And yes, as you say, it is my wife who has to cancel it - that's what I meant! 

Thanks for your help. Feel free to correct me again if I have got it wrong still! But broadly my take-home message is 'stop worrying, nothing's actually happening'

Dazed_and_C0nfused

inwortle said:

Ok, thanks! Sounds like I'm worrying unnecessarily. I may have misunderstood exactly how it's working. As I understood it, we were eligible because my wife, as a student, wasn't paying tax, so was transferring some of her allowance to me. 
But what I'm hearing is that didn't make us eligible, it just made it profitable for us. Whereas now, as she's working and paying tax, she's still transferring some of her tax allowance to me, but that just means she pays more tax and I pay less, right? Making it make no difference to the household overall. Hence why it doesn't actually matter and HMRC aren't pounding down my door for their £200. 

And yes, as you say, it is my wife who has to cancel it - that's what I meant! 

Thanks for your help. Feel free to correct me again if I have got it wrong still! But broadly my take-home message is 'stop worrying, nothing's actually happening'

You are on the right lines now.

There are two key elements to Marriage Allowance, who is eligible and who can benefit (as a couple).

Unless either of you are higher rate payers (or eligible for Married Couple's Allowance) then you will be eligible.

But you will normally only benefit if one spouse doesn't need their full Personal Allowance.

In your new situation your wife has a reduced Personal Allowance of £11,310, so she is presumably paying more tax than she would really need to.

You meanwhile retain the standard Personal Allowance but get £252 knocked off your tax liability each year (whilst PA is £12,570).

But overall, as a couple, you are unlikely to be worse off.