Marriage tax allowance & tax codes - have I made an error?

ChasingtheWelshdream · 4 December 2019 at 1:29AM

Good evening,

I wonder if anyone could help me with understanding the marriage tax allowance - specifically if I have made an error in claiming?

I applied for the allowance as I anticipated being a non-tax payer as usual - I expected to earn approx £11k in 2019/20. My tax code changed from 1250L to 1125N whilst my OH increased by 125 - so far, so good.

For a short time (5 weeks), I earned a higher salary, which was duly taxed. I then went back to my old wage, and expected to see a refund in the following month or two.

I've noticed my tax code changed to 1000c at the same time and has remained so since. Despite now earning my previous lower wage, I am still being taxed 3 months after the reduction in wage. Payroll are unsure what this tax code is, but it seems to indicate HMRC are assessing me monthly.

I was gathering everything together ready to speak to HMRC, but then remembered the marriage tax allowance and wonder if this is why?

I've just realised that the temporary increase in salary will take me to £11,550 by the end of 2019/20 tax year. I believe I could only earn £11,250, after transferring my allowance to OH. Am I understanding that correctly? (£12500 - £1250, transferred to OH) So I will be just over the threshold to be eligible?

If so, after reading Martin's article on here, have I inadvertently made us worse off as a couple? Can I revoke my claim for this year or have I scuppered things?

I have been trying to call HMRC, but unfortunately haven't been able to reach them as yet, but I'd like to be armed with information for when I do.

If you are still reading, many thanks and I apologise if these are silly questions! :rotfl:

Dazed_and_confused · 4 December 2019 at 3:43AM

1000c

That doesn't look like a valid tax code. Can you look at your personal tax account on gov.uk and confirm the tax code and how it is made up?

have I inadvertently made us worse off as a couple?

That is very unlikely. If your taxable salary ends up being £11,550 then you will need to pay £60 in tax (11550 less Personal Allowance 11250 = 300 income to be taxed at 20% = £60).

But if your spouse earns (wages, business profits or pension income) at least £13,750 then the Marriage Allowance claim will have saved them £250.

So as a couple you would be £190 better off.

If the Marriage Allowance is cancelled for this tax year then you will save £60 but your spouse will have upto £250 more tax to pay.

ChasingtheWelshdream · 4 December 2019 at 8:27AM

Thank you Dazed and Confused, that’s very reassuring. I’m not too hot on the maths. OH is self-employed and employed but we believe he will earn around £17k by financial year end.

I hadn’t thought of my HMRC tax account, so I’ll do that this morning. Payroll we’re surprised at the tax code too, so I shall investigate! 🙂

ChasingtheWelshdream · 4 December 2019 at 11:47PM

Good evening,

I have checked my tax account online and think I have figured it out.

I have two tax codes. I work for local government - Welsh, hence the 'C', and we occasionally help with elections. The payments are set up on a separate payroll system, rather than integrated with our main employment. The last election was a while ago and I completely forgot about it. It seems this has generated a separate tax code.

So, I have:

C1000N (main employment). Payment to date: £7675. Tax to date: £285.03.

C125. (for election payments) Payment to date: £180. Tax to date: £36.

Total: £7855. Tax paid: £321.03.

I will be helping at the General Election, and will earn an additional £90, which I assume will be under the C125 code. Total for year - £270.

With revised figures, I calculate my total income (including additional election work) for 2019/2020 will be £11,777.

I should be due a tax refund as I have paid in excess already. (£11,777 - £11,250 = £527. Tax @20% = £105.4)

OH should be in the region of £17k.

So, with Dazed and Confused's information below, I believe we are still better off with the marriage tax allowance. :-D Thank you for clarifying. :beer:

However, my tax account shows Non Coded Income - £627. I have no idea what this is!

If I want to reclaim the tax now (which would be very helpful at this time of year), can I ask HMRC to do anything or do I have to wait until after April?

Dazed_and_confused · 5 December 2019 at 12:04AM

However, my tax account shows Non Coded Income - £627. I have no idea what this is!

Nothing to worry about, just ignore it.

If I want to reclaim the tax now (which would be very helpful at this time of year), can I ask HMRC to do anything or do I have to wait until after April?

You cannot reclaim any tax now. The whole point of PAYE is that tax is deducted throughout the year based on your earnings each pay day.

You may get a refund through your wages at your main employment if your annualised income reduces. Assuming this is monthly pay then of the next month's taxable pay is less than £834 you should get some of the tax refunded through your wages.

You should get all the £36 refunded when you are paid for the general election. So the actual payment would be £90 plus £36 tax refund.

After you have been paid for the election you could ask HMRC to allocate more of your tax code allowances back to your main job. If you have earned £270 from the election job and don't expect to do any more of that work in the current tax year then you only need tax code of C27T against that income which would give more allowances available to your main job and another refund through your wages.

ChasingtheWelshdream · 5 December 2019 at 12:10AM

Thank you, that is really helpful!

Ah yes, I once had three low-paid jobs and asked HMRC to split my code between them according to the annual income in each. I had forgotten that.

Yes, the election will be the last one for a good while, and definitely this tax year - it's unusual there's been 3. I'll do that and then see if HMRC will change my main employment. If not, well I'll probably forget and find a refund one day!

Thank you so much again for all your help. :-)

Dazed_and_confused · 5 December 2019 at 12:12AM

Worst case scenario you will get a refund direct from HMRC next summer (for 2019:20 tax year).

Marriage tax allowance & tax codes - have I made an error?

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