Marriage Tax Allowance boundary
Liquidity
Posts: 74 Forumite
I currently receive the marriage tax allowance, and as I've taken on a new job I'm not sure if I will cross the boundary threshold (£45,000?) this tax year.
It's quite complicated as I have some variables in my salary (like bonus) which I don't know yet, and as I'm close to the threshold I may not even know until the March payslip next year if I've crossed it or not.
Do they automatically retract it if you go over the threshold? If not, can you retrospectively cancel it?
It's quite complicated as I have some variables in my salary (like bonus) which I don't know yet, and as I'm close to the threshold I may not even know until the March payslip next year if I've crossed it or not.
Do they automatically retract it if you go over the threshold? If not, can you retrospectively cancel it?
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Comments
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There is no specific threshold, it depends on your own circumstances.
If neither you or your spouse are liable to pay higher rate tax you are still eligible.
So in Scotland you might have taxable income of just £44,000 and pay higher rate tax but in the rest of the UK you could have taxable income of say £60,000 and pay £15,000 into a private pension and still be eligible as the pension payment increases the amount of basic rate tax you pay preventing you paying any higher rate tax.
If at the end of the tax year it turns out you do pay higher rate tax then as I understand it HMRC will cancel the Marriage Allowance for that year and subsequent years.
What they don't seem to do is cancel it part way through the year, for example if you got a big Christmas bonus which meant you were a higher rate payer they wouldn't cancel it straight away but would wait until they reviewed things at the year end.
If your circumstances changed and you were eligible again in a later tax year I think your spouse would have to apply again.0 -
Dazed_and_confused wrote: »There is no specific threshold, it depends on your own circumstances.
If neither you or your spouse are liable to pay higher rate tax you are still eligible.
So in Scotland you might have taxable income of just £44,000 and pay higher rate tax but in the rest of the UK you could have taxable income of say £60,000 and pay £15,000 into a private pension and still be eligible as the pension payment increases the amount of basic rate tax you pay preventing you paying any higher rate tax.
If at the end of the tax year it turns out you do pay higher rate tax then as I understand it HMRC will cancel the Marriage Allowance for that year and subsequent years.
What they don't seem to do is cancel it part way through the year, for example if you got a big Christmas bonus which meant you were a higher rate payer they wouldn't cancel it straight away but would wait until they reviewed things at the year end.
If your circumstances changed and you were eligible again in a later tax year I think your spouse would have to apply again.
Thanks - so I am right to think this is automated, and I shouldn't have to worry about manually cancelling this should I exceed the threshold? There's no easy way of seeing if it's still in effect, as far as I know.0 -
HMRC should review the 2017:18 tax year during the next few months and you should receive a new tax code if anything changes.
If your current tax code ends with M you are still receiving Marriage Allowance.
If your current tax code starts with a K (or SK) you can check your personal tax account on gov.uk to see if the code still includes Marriage Allowance.0
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