Marriage Allowance
Options
Brammah121
Posts: 1 Newbie
in Cutting tax
Hi
Don't know if someone can help
My wife and I applied for Marriage Tax Allowance claiming for 16/17 onwards about a week ago and today I received a cheque for £360 however my wife received a letter saying she now owed £500 in tax.
She called HMRC and they claimed that for 16/17 she had not paid enough tax due to the marriage allowance and that she did indeed owe £500 and that we would receive a letter detailing how to pay as she won't pay enough tax now to cover it by changing her tax code
Is any of this correct? Surely if we were going to end up having to pay tax back the application shouldn't have been accepted for 16/17?
Any help would be much appreciated
Don't know if someone can help
My wife and I applied for Marriage Tax Allowance claiming for 16/17 onwards about a week ago and today I received a cheque for £360 however my wife received a letter saying she now owed £500 in tax.
She called HMRC and they claimed that for 16/17 she had not paid enough tax due to the marriage allowance and that she did indeed owe £500 and that we would receive a letter detailing how to pay as she won't pay enough tax now to cover it by changing her tax code
Is any of this correct? Surely if we were going to end up having to pay tax back the application shouldn't have been accepted for 16/17?
Any help would be much appreciated
0
Comments
-
Unfortunately the marriage allowance is basically a transfer of tax allowances.
If your partner earnt above the limit in that year but has now transferred a portion of allowance then they will have extra tax due
The allowance works best where the person giving earnt less than £10k a annual0 -
You are getting eligibility and being able to benefit from Marriage Allowance totally mixed up.
With one very particular exception involving dividend income anyone who isn't liable to higher rate tax can successfully apply for Marriage Allowance. Whether or not they can benefit from doing this then depends on their income.
It sounds as though your wife may have been a basic rate taxpayer in 2016:17 (or by applying she became a basic rate taxpayer and owes some money).
What was your wife's situation income wise in 2016:17? Applying for Marriage Allowance itself wouldn't usually result in a tax bill for one year of £500 so there may be other things complicating matters.0 -
Only with the full details can anyone check this. Need to know for each of you the taxable gross and tax paid for 16/17 tax year along with the tax codes that were used. Also anything taxable not included in these figures.0
-
We have had similar today. I have received a cheque for 2016/2017 but my husband has received notice of under payment for 2015/2016. Hopefully, I will receive a letter for the corresponding year in the coming days. We plan to cash the cheque received but reserve the amount owed until we get clarification of the same year in my name.0
-
Was your tax upto date before your husband applied?
And how much is the cheque for?0 -
Hello . I have had the same confusion, We claimed back the MTA since 2015 which is the first year it started. but we only claimed back this year. The application was in my wife's name as the lower tax payer between the 2 of us. Because we have claimed 10% of her tax allowance it stated that I would get £221 but she now owed £212 and then for 2016/2017 despite that she has earned no more apart from the poultry 1% Public Purse pay increase she now owes a further £221.20. They are currently assessing her underpayment for 2017/2018 and no doubt she will owe even more money even though the personal allowance has gone up. In this period I have received a cheque for £440 approx. Like you I totally fail to understand why they approve the allowance in one hand and take it back in the other. I only hope that in 2018/2019 that she will not pay any tax at all. Personally I wish we had not bothered in the first place.0
-
What grounds is there for them to not allow it?
A basic rate payer earning £40,000 is eligible for Marriage Allowance. There is almost certainly no point in them applying but the tax legislation means they are eligible.
Why did your wife apply for tax years in which (it appears) she was due to pay basic rate tax?0 -
You seemed to understand and then seem totally clueless as to how the Marriage Allowance works.Because we have claimed 10% of her tax allowance it stated that I would get £221 but she now owed £212 and then for 2016/2017 despite that she has earned no more apart from the poultry 1% Public Purse pay increase she now owes a further £221.20.
You are transferring 10% of the Personal Tax allowance between yourselves, not gaining an extra 10%.
She transferred 10% of her allowance to you meaning you can earn more before paying tax, so you got a rebate for £221.
Her allowance went down by 10% so she has to pay more tax on her income, so she gets charged the £221.
Why did your wife transfer some of her allowance to you if she was earning over £11,500, totally don't get it. You both seem to be earning over the personal tax allowance anyway.
The Marriage Allowance is there so that if one of you is not working, or not making full use of it, then they can transfer 10% of it to the other half so they pay less tax.
So if she was only earing £10,000 or £8000 or nothing, then she could happily transfer 10% of her unused £11,500 personal allowance to you and it would not affect her as she had no use for it.
HMRC approved the allowance transfer because you asked them to do it, it's not their fault.
I've read numerous posts on these forums stating that the HMRC staff are clueless, I personally think they are doing an excellent job considering the clueless calls they have to put up with.0 -
The application was in my wife's name as the lower tax payer between the 2 of us.
Personally I wish we had not bothered in the first place.
Why did you bother?
Se may have been the lower tax payer but if she got a demand for £221 underpaid tax, then she must have been earning at least £11,500 and making full use of her tax allowance.
Why then transfer 10%, £1150 of this allowance to you so she has to pay 20% tax on an extra £1150 of her income?
What did you think was going to happen?
Were you confused by Martin Lewis's sometimes sensationalist tabloid headlines?0 -
The obvious solution is for you to give the £440 to your wife.Hello . I have had the same confusion, We claimed back the MTA since 2015 which is the first year it started. but we only claimed back this year. The application was in my wife's name as the lower tax payer between the 2 of us. Because we have claimed 10% of her tax allowance it stated that I would get £221 but she now owed £212 and then for 2016/2017 despite that she has earned no more apart from the poultry 1% Public Purse pay increase she now owes a further £221.20. They are currently assessing her underpayment for 2017/2018 and no doubt she will owe even more money even though the personal allowance has gone up. In this period I have received a cheque for £440 approx. Like you I totally fail to understand why they approve the allowance in one hand and take it back in the other. I only hope that in 2018/2019 that she will not pay any tax at all. Personally I wish we had not bothered in the first place.
Everybody happy.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards