Has your claim for marriage allowance transfer been refused?

10th April 2019

 

HMRC have recently attempted to remove a marriage allowance transfer for a couple, where the transferor had less than the 10% personal allowance unused. This treatment is incorrect as outlined below:

 

Background to the transfer

The marriage allowance transfer was introduced from 5 April 2015 onwards and allows a person to transfer 10% of their personal allowance to their husband, wife or civil partner. This is available when both parties are married or in a civil partnership and are basic rate tax payers before and after the transfer.

 

For the claim to be beneficial one party’s income should fall within their 0% tax bands and personal allowance, for 2019/20 this is £12,500. If income is below this level, a flat amount of 10% (£1,250 of the personal allowance) can be transferred leaving the transferor with a new allowance of £11,250.

 

The issue for transferor with less than 10% of their personal allowance available

 

Where the transferor has less than 10% of their personal allowance unused before the transfer, they are still able to make the claim; however, any amount above the new personal allowance after transfer will become taxable at the basic rate.

 

We have found in some cases, however, that HMRC have been removing the marriage allowance transfer if there is not the full 10% personal allowance available. This is the incorrect treatment and should this happen to you; please be sure to question this with HMRC.

 

Please note: If you qualify for the marriage allowance transfer, you may be able to make a backdated claim from 5 April 2015 onwards (the date the transfer became available).

 

To check if you are eligible to claim and to find out the potential tax savings for your household, there is a HMRC Marriage Allowance calculator that may be of use: https://www.tax.service.gov.uk/marriage-allowance-application/benefit-calculator/

 

If you have any questions on the matters outlined above or think this may affect you, please contact us and one of our team will be happy to help: https://www.whitingandpartners.co.uk/about-us/contact-us/



 
Other items in Blogs
 
Ben Kilby
4th May 2021 Sage 50 VAT ‘T’ codes

With the changes to the reverse charge on VAT returns due to the UK leaving the EU from 1 January 2021, I thought I would share a reminder of the default tax codes within Sage from v27.1 onwards:   T0 – Zero rated transactions T1 – Standard rated transactions – Currently 20% T2 – Exempt…

Read More »

Angelica Hunt
19th April 2021 HMRC – Tax refund delays

A number of our clients are experiencing long delays in receiving tax refunds from HMRC.   HMRC attribute these to the need for them to perform security checks in order to combat fraudulent claims.  In some cases, HMRC need more information in order to verify genuine claims.   They may issue a verification letter, either…

Read More »

Ian Piper
15th April 2021 2021 SME Growth: Revenge Spending?

As we pass the Covid-19’s first anniversary of its impact on our area’s economy, accounts of local SME’s are now starting to show part of the damage they have experienced through the lock-downs and associated restrictive measures. Thankfully, through Government financial help and the nimble footwork of businesses adapting to survive, the overall effect upon…

Read More »

Jaimie King
15th April 2021 Life after CBILS: The Recovery Loan Scheme

The government-backed Coronavirus Business Interruption Loan Scheme closed on 31st March to new applicants. Thankfully, the government has put in place further support for businesses, to follow this.   The Recovery Loan Scheme – Government backed loans, 3 months – up to 6 years depending on the product – Up to £10m, no cap on…

Read More »

Vanessa Pearson
26th March 2021 6 April: A Guide to Off-Payroll Working Tax Rules

The proposed new rules apply regarding who determines IR35 status for freelancers hired by medium and large companies are imminent. Our Brief Guide will help find out how this affects you and what you can do: A Brief Guide to Off-Payroll Working Blog entry by: Vanessa Pearson

Read More »

Ben Kilby
25th March 2021 I hear a rumour…

I hear a rumour that Lloyds Agricultural banking team based in Edinburgh has been disbanded and merged within other teams around the country. Although some within the new regional teams may have some knowledge of agriculture it has been suggested that customers felt that this was not important. It seems that the agricultural specialism within…

Read More »