Marriage Allowance
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Purplehaze58 wrote: »I’m not ranting... you asked a question so I explained. Yes Im a UK resident born and bred. I know I could have still transferred some allowance to him but why would I do that when I had used all of my tax allowance up, I would then owe the tax man as per the letters I got. Please teach me where I am misunderstanding. I’m not ranting truly.
Read, and learn.
1. Having personal allowance "left" has nothing to do with eligibility for MAT. The only significant restriction on UK-residents is that neither party to the transfer must be - or would be - higher rate tax-payers.
2. HMRC has chosen not to challenge eligible applications for MAT. This has resulted in a number of cases where there was no financial gain - or loss - to the taxpayers involved. You will find many complaints of "what a waste of time applying for MAT was" across MSE forums.
3. You seem to think that there is no point in applying for MAT if you have exhausted your Personal Allowances. This may be so in your own circumstances, but there are circumstances where basic-rate taxpayers will benefit from MAT.0 -
Read, and learn.
1. Having personal allowance "left" has nothing to do with eligibility for MAT. The only significant restriction on UK-residents is that neither party to the transfer must be - or would be - higher rate tax-payers.
2. HMRC has chosen not to challenge eligible applications for MAT. This has resulted in a number of cases where there was no financial gain - or loss - to the taxpayers involved. You will find many complaints of "what a waste of time applying for MAT was" across MSE forums.
3. You seem to think that there is no point in applying for MAT if you have exhausted your Personal Allowances. This may be so in your own circumstances, but there are circumstances where basic-rate taxpayers will benefit from MAT.
Yes I understand now that you have explained that HMRC chose not to challenge eligible applications, this is what I didn’t know. It doesn’t say anything on their website that I can see. Al, I see is this:
Who can apply
You can get Marriage Allowance if all the following apply:
you’re married or in a civil partnership
you don’t earn anything or your income is £11,500 or less
your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)
This is why I am surprised because of 2nd line of income of £11.500 or less.
Thank you for the info.0 -
Purplehaze58 wrote: »Yes I understand now that you have explained that HMRC chose not to challenge eligible applications, this is what I didn’t know. It doesn’t say anything on their website that I can see. Al, I see is this:
Who can apply
You can get Marriage Allowance if all the following apply:
you’re married or in a civil partnership
you don’t earn anything or your income is £11,500 or less
your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)
This is why I am surprised because of 2nd line of income of £11.500 or less.
Thank you for the info.
You've a right to be annoyed with HMRC. They've handled MAT with ignorance and brazen-ness. HMRC have two responsibilities. One, to interpret the legislation correctly and, two, to produce working processes that implement the legislation's intent. I think that they've failed in both with MAT.
The legislation has always made it clear that there are two types of applicant for MAT. For non-UK-resident taxpayers the applicant must have unused Personal Allowances to be eligible. For UK-resident taxpayers (hence my earlier question) the looser requirement is that they must not be subject to higher-rate income tax. I suspect that HMRC have not understood that there are these two cases - hence the confusing guidance you quote.
HMRC changed this faulty rule into "guidance", perhaps because they couldn't think of a case where a basic rate taxpayer could benefit from MAT.
This sloshing around has left HMRC staff completely up a gumtree about how to deal with MAT. It has also left the "experts" up the same gumtree. Recently, BBC Money Box got in an expert to, essentially, parrot what was on the HMRC website. I emailed them about this "advice" given and the replies, were, in order:
1. You're simply wrong.
2. You're simply wrong https://www.gov.uk/marriage-allowance/how-it-works
3. I see what you mean http://www.accountingweb.co.uk/tax/personal-tax/marriage-allowance-mayhem I apologise.
So you see, there's a LOT of ignorance - and ranting - about.
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The recipient of the allowance transfer cannot be paying higher rate income tax or the transfer fails. I filled in my Tax Return for 16/17 and now have a tax bill of £220 to pay even though I'm not paying higher rate tax. Several places ( both on MSE and gov.uk ) refer instead to an upper limit for 'income' (£45000 in 16/17). I had dividend and savings income that _just_ pushed me over £45k and the tax allowances for those separately meant I didn't pay higher rate tax. The text of the 2014 Finance Act, which introduced MA, refers to higher rate tax and explicitly mentions savings and dividend income. The £45k references appear to just be lazy shorthand but HMRC seem to applied that limit anyway. Other allowances weren't mentioned, and I don't use them, but CGT allowance and Rent a Room might also cause difficulties for those near the higher rate threshold.
Any advice? I suspect getting HMRC to change is unlikely.
FA 2016 introduced further detail. Basically that, if without the dividend allowance there would have been higher and/or additional dividend tax liability, you are excluded from MAT.0 -
Unfortunately HMRC are no longer trustworthy. They no longer have to tell you the truth about your financial liabilities. Well not at least until you owe them penalties. We all now need to know our own liabilities so pretty much all need our own accountants to file our own details as we cannot now trust HMRC to even deal with our basic responsibilities in a efficient way.0
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Unfortunately HMRC are no longer trustworthy. They no longer have to tell you the truth about your financial liabilities. Well not at least until you owe them penalties. We all now need to know our own liabilities so pretty much all need our own accountants to file our own details as we cannot now trust HMRC to even deal with our basic responsibilities in a efficient way.
So you've read this far so I guess you don't believe me. So read the recent posts by dori2o. She (or I think she anyway) posts stating some things re HMRC & posts well re legislation etc. This is definitely not a criticism of dori2o, but of the future as stated, which is fine for me because I know, but what about the milliions out there who maybe don't know, who never get a letter (well not until it is a penalty letter), the ones who don't know about MSE, the ones who don't realise that the news item actually refers to/includes them. The ones who don't think of themselves well off but are no longer entiltled to child benefit. The list will go on!0 -
You've a right to be annoyed with HMRC. They've handled MAT with ignorance and brazen-ness. HMRC have two responsibilities. One, to interpret the legislation correctly and, two, to produce working processes that implement the legislation's intent. I think that they've failed in both with MAT.
The legislation has always made it clear that there are two types of applicant for MAT. For non-UK-resident taxpayers the applicant must have unused Personal Allowances to be eligible. For UK-resident taxpayers (hence my earlier question) the looser requirement is that they must not be subject to higher-rate income tax. I suspect that HMRC have not understood that there are these two cases - hence the confusing guidance you quote.
HMRC changed this faulty rule into "guidance", perhaps because they couldn't think of a case where a basic rate taxpayer could benefit from MAT.
So you see, there's a LOT of ignorance - and ranting - about.
Just found the email HMRC sent me when I applied it states:
Earlier tax years
HMRC will check your eligibility before processing your application
So as I didn’t fulfill eligibility number 2 of not earning less than the specified amount I would say it’s their error not mine.
No wonder people are getting tax bills...it’s all just so wrong.0 -
Purplehaze58 wrote: »So as I didn’t fulfill eligibility number 2 of not earning less than the specified amount I would say it’s their error not mine.
So during the disputed years you had taxable income of £40k plus?0 -
So during the disputed years you had taxable income of £40k plus?
1- you’re married or in a civil partnership
2 - you don’t earn anything or your income is £11,500 or less
3 - your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)
Line 2 of their web site for eligibility.0 -
Purplehaze58 wrote: »1- you’re married or in a civil partnership
2 - you don’t earn anything or your income is £11,500 or less
3 - your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)
Line 2 of their web site for eligibility.
Haven't you understood, yet? Have I wasted my time? The HMRC advice you quote is nonsense.0
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