Marriage Allowance

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  • polymaff
    polymaff Posts: 3,903
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    DebbieR wrote: »
    ...you could benefit ....

    And it is that weaselly phrase that is at the heart of all these conversations, Debbie :)
  • polymaff
    polymaff Posts: 3,903
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    teddysmum wrote: »
    Perhaps we should consult Osborne, now he's out of a job......but perhaps not.

    Well, they do say that the best game-keeper is an ex-poacher.

    ... but perhaps not. :)
  • teddysmum
    teddysmum Posts: 9,471
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    polymaff wrote: »
    And it is that weaselly phrase that is at the heart of all these conversations, Debbie :)


    It does read as though the £5000(for last year) was allowed.


    The HMRC and I did discuss two cases where people would not qualify, even so :


    1) The lady who posted that she had an unexpected interest payment on her 65+ bond, putting the interest over £5000


    2) Someone who has an entire income of (say) £15000 from savings interest alone.


    He explained that the application system will allow only up to £5000 of savings interest in the calculations, as it has no facility to split the interest so that the excess combine with the non-savings income. (The prospective donor would still pay no tax , but would be ineligible for MAT.)
  • Thank you for all the responses to my post #537. As this was my first venture on to this forum (indeed on to any forum) please excuse me if I am not using the correct way of replying but I am totally unfamiliar with the forum procedure or etiquette.
    As a non-professional, but someone polymaff would describe as Joe Public (#589), the sources of information I have relied on have been:
    1) gov.uk - which some have pointed out to me as giving conflicting information
    2) HRMC by telephone.
    (i) Good for you, teddysmum (post #578) for getting through so quickly and speaking to someone in the MAT department! In the past few weeks since my P800 calculation I have had several lengthy calls (two of which were each over 1 hour 20 mins, although a lot of that time I was on hold waiting for someone to come back to me) and, despite asking, did not manage to speak to someone more familiar with MAT rules. No clarification given. When I contacted the forum I did not feel a further phone call from me would achieve much more. However, you have achieved much more than I was able to. Thank you.
    (ii) In November 2015, before making the online application for MA (which I had confirmed by email as being successful) I phoned HMRC to check whether I should apply. I have retained the notes from that call where I have listed the questions I asked, one of which was 'What happens if I exceed £5000 in savings interest?' (My only other income was two small pensions, which I knew to be fixed at £8285; therefore ,my savings interest was the only variable and unpredictable in advance.) The implications for both tax liability and MAT were discussed and it was confirmed that, as long as I still had unused PA, I would be a non-tax payer and eligible for MAT. (See point 3) in teddysmum's #578 post as confirmed to her by HMRC.)
    3) MSE website, particularly the article by Sam preceding this forum to which I referred in post #537 and the following question:
    'Q. I’ve seen on the government website it says you can't get the marriage tax allowance if you have over £5,000 of savings interest?] That's not true. We've had a few people ask us this question – if this is you, you're probably misreading the situation.
    It comes from this question on the apply section of the HMRC website:
    "Is your annual income £11,000 or less? (don't include savings interest under £5,000)."
    It's all about what counts as a non-taxpayer, and it does get a little complicated as it's all due to something called the tax-free savings allowance for lower incomes. That means you can earn £11,000 under your personal allowance and then have £5,000 of savings interest tax-free and still not pay tax on it.
    So in that circumstance you could actually earn more than £11,000 in total income and interest, and still count as a non-taxpayer. This question is just a slightly cumbersome way of saying that.'
    I would agree with teddysmum (post#577) that some clarification of the above from Sam would be helpful. As the question particularly asks about 'if you have OVER £5000 of savings interest' I would appreciate it if Sam explained more fully, especially with regard to HMRC's response to teddysmum when she raised my particular situation (post #578). HMRC and Sam would not seem to agree on this.
    (Teddysmum (post #588) - As the above quoted piece by Sam says that they have had a few people ask the question about over £5000 in interest there must be some way of asking him questions.)
    P S Since I started to write this teddysmum's post #594 has just come online offering a fuller, very helpful, explanation. Thank you, teddysmum. But do I interpret this as meaning I am not eligible for MAT because whoever wrote the software for the application system failed to write in this facility? System design flaw rather than what was intended by the MAT rules as I am a non-tax payer with unused PA? If so, this would account for the difference between eligibility confirmed by a human on the phone on 15 November 2015 (as referred to above) and ineligibility computed by a machine on my P800 recently. What do others think?
    HMRC have given me only a few more days in which to pay them the £212 back and I really would like to understand how MAT applies in my particular case before I do. I am recovering from heart surgery and have very high blood pressure problems which are not being helped by all this stress and anxiety. I fear I shall soon be 'stardust 'literally, rather than it just being my nickname!
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458
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    edited 20 July 2016 at 11:06PM
    It is apparent no one on this thread wants to believe HMRCs own guidance (admittedly contradictory in places) but sheramber posted up the actual tax law in an earlier post and I think this matches this extract from gov.uk, the crucial element here being the line I have highlighted in bold.

    Stardust16 is not liable above the basic rate e.g not higher (40%) or additional rate (45%) and as such is perfectly entitled to apply for marriage allowance (assuming spouse is also not higher or additional rate payer)

    As you have already successfully applied for the marriage allowance the only thing left to resolve is the tax position for last year and I would re-iterate what I said in an earlier post, other MSE posters have referred to updates to HMRC systems or problems recently being resolved which specifically related to marriage allowance so maybe you have been affected by this?

    I think it would be worthwhile you phoning HMRC again and asking them to calculate the tax for last year again - if what other posters have said is true then you should now get the correct result.

    *6 Available to spouses/ civil partners born after 5 April 1935. This allowance is 10% of the personal allowance for those born after 5 April 1938. It allows a spouse or civil partner who is not liable to income tax above the basic rate to transfer this amount of their personal allowance to their spouse/ civil partner. The recipient must not be liable to tax above the basic rate. The recipient is eligible to a tax reduction of 20% of the transferred amount.
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458
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    edited 20 July 2016 at 11:24PM
    Stardust16, it would really help if you could post up the details requested I'm my post #538. Preferably in a clear,unambiguous way

    This article is worth a read as well
    https://www.swat.co.uk/AccountancyNews/AccountancyNewsArticle/tabid/189/ArticleID/1093/HMRC%E2%80%99s-interpretation-of-the-Marriage-Allowance.aspx
  • mintypeas
    mintypeas Posts: 18 Forumite
    im confused as some people are getting cheques for £212 within weeks and when we ring they tell us that there has been a mistake with the system and no one has been paid. is it because we asked to be paid into our account. we applied for marriage allowance in january and have been given the same excuse since end of april.
  • teddysmum
    teddysmum Posts: 9,471
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    I have the impression that at the time of application, MAT was appropriate but the extra interest voided the transfer,so the tax saving had to be paid back.


    The young man said that the transfer specifically only lets you use £5000 of savings interest, but of course this doesn't affect the non-payment of tax on all the interest, as the total income falls within the correct boundaries.


    PS My 'complaint' about my post asking for clarification from MSE Sam, made in the hope of having the post referred to Sam, failed.


    They sent an email , with the excuse that they cannot give replies to individuals, even though the point of the 'complaint' was to get a reply on the forum; so not to an individual.


    I think they hide behind this practice.
  • jimmo
    jimmo Posts: 2,281
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    It may be worth having a further look at the legislation which is a bit tricky in this case because the key legislation is the Income Tax Act 2007 as amended by Finance Act 2014 so that’s at least 2 places to look at simultaneously.
    Section 11 Finance Act 2014 creates, amongst other things, a new Section 55C of the Income Tax Act 2007. Section 55C (1) ( c) specifies that the donor must not be a higher rate taxpayer either before or after the transfer.
    http://www.legislation.gov.uk/ukpga/2014/26/section/11
     
    That, it seems to me, is relatively straightforward and, for the majority of people, that is the end of the matter. However Section 55C (1) (d) adds a further clause relating to the previously existing Section 56 (Income Tax Act 2007) but only Section 56 (3).
    http://www.legislation.gov.uk/ukpga/2007/3/section/56
    I would think that the vast majority of people who live in the UK will qualify under Section 56 (2) (a) and will therefore not be affected by Section 56 (3) and, reverting to the “new” legislation, they will not be affected by Section 55C (1) (d) so the condition in Section55C (2), restricting the transfer to those whose total income is below the normal personal allowance, will not effect them.
    Really hope that makes sense. If it does we can discuss what you do about it.
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458
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    edited 23 July 2016 at 4:56AM
    xylophone wrote: »
    The calculation below may explain what has happened in Stardust's case, but I am by no means sure.

    Pensions £8285
    Savings £5467 this is greater than £5000 0% Savings Band so whole personal allowance of £10,600 is used against total).

    Total Income £11,752.

    Deduct £10,600

    £1152 of 0% savings band band available.


    £11,752 - £9540 (the reduced personal allowance) = £2,212

    £2,212 - £1,152 (0% savings band available) = £1060

    Tax due @ 20% on £1060 = £212 which is the amount HMRC say Stardust owes - in fact, it amounts to her husband giving her back the £212 for her to return to HMRC?

    Any advance on this, anyone?

    As jimmo is a former tax inspector and out of everyone commenting on this thread the most likely to understand the tax law then it seems to me that stardust16 IS is perfectly entitled to have applied for marriage allowance transfer.
    Post #600 refers.

    I would calculate the tax position, using your baseline figures, as

    Pensions £8285
    Savings £5467

    Total Income £13,752 (why did you have £11752 here?)

    Deduct £9,540 (Personal Allowance after Marriage Allowance transfer)

    £3152 x 0%* = £0.00 tax due (* taxable at savings rate of 0%)

    I really don't understand why stardust16 doesn't simply ask HMRC to re-calculate her tax for last year - as previously stated there are posts in other threads from people who had had problems with marriage allowance and their incorrect calculations have now been resolved so I can't see any problem with her phoning and asking them to re-calculate her tax.

    She doesn't need to get into a lengthy discussion or debate, just simply ask them to re-calculate it for last year and if they say it's still the same i.e. she owes £212 then we'll have to go back to the drawing board.
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