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Where Taxpayers and Advisers Meet

Marriage allowance - HMRC confused

bd6759
Posts: 3106
Joined: Sat Feb 01, 2014 3:26 pm

Re: Marriage allowance - HMRC confused

Postby bd6759 » Thu Feb 14, 2019 12:48 pm

The article says
Standard definition of basic rate applies, therefore subject to pension / gift aid contributions
I say that has no statutory basis and is wrong.

Dave12335
Posts: 23
Joined: Sat Feb 09, 2019 10:09 am

Re: Marriage allowance - HMRC confused

Postby Dave12335 » Thu Feb 14, 2019 12:56 pm

I’d be surprised if this article is wrong too ?

https://www.taxadvisermagazine.com/article/marriage-allowance-1

robbob
Posts: 2827
Joined: Wed Aug 06, 2008 4:01 pm

Re: Marriage allowance - HMRC confused

Postby robbob » Thu Feb 14, 2019 3:22 pm

bd6759
The first question you need to ask yourself is what statutory authority you have for extending the basic rate band. I don't think you will find one. Any person who earns more that the limits set out in s10 ITA will be liable to tax at the higher rate. The fact that there are reliefs that can reduce the amount of tax payable cannot change that.
Any person who earns more that the limits set out in s10 ITA will be liable to tax at the higher rate.
Apologies for being confused here bd6759 - i have the run the calcs and it is clear that the hmrc approved(forced) calculations will grant the marriage allowance transfer if the basic rate band is extended for pension contributions/gift aid and the income falls within that revised higher limit as per the op's original figures per their first post.

I have also had a quick look at s10 ITA and that does appear to confirm that the basic rate band can be extended with regard to gift aid payments and pension payments - am i missing something here?

https://www.legislation.gov.uk/ukpga/2007/3/section/10
The basic rate limit [F14and higher rate limit are] increased in some circumstances: see—
(a)section 414(2) (gift aid relief), and
(b)section 192(4) of FA 2004 (relief for pension contributions).

bd6759
Posts: 3106
Joined: Sat Feb 01, 2014 3:26 pm

Re: Marriage allowance - HMRC confused

Postby bd6759 » Thu Feb 14, 2019 4:49 pm

I stand corrected. I made the schoolboy error of glancing at the legislation as enacted, rather than as amended. Even then I have no excuse because such a provision was contained at s20.

Section 192(4) Finance Act 2004 (relief at source) says:
If (apart from this section) income tax at the higher rate... is chargeable in respect of ant part of the individuals total income... the basic rate limit... [is] increased.
I suppose it falls on the definitions of “is liable” and “is chargeable”. Have HNRC published their view on why they do not want to allow the relief in determining the basic rate limit?

Lambs
Posts: 1420
Joined: Wed Aug 06, 2008 3:15 pm

Re: Marriage allowance - HMRC confused

Postby Lambs » Thu Feb 14, 2019 10:56 pm

B,

B******s.

Even a cursory reading of ITA 2007 s 10 would show that it is conditional on ANY OTHER PROVISIONS OF THE INCOME TAX ACTS that provide otherwise. The provisions relating to Gift Aid and to pension contributions do exactly that - extend the basic rate limit - rather than give some form of tax relief.

Please do consider the fact that you are telling a taxpayer that he or she cannot have a tax relief and, if you are wrong to do so, then you are working to deny the taxpayer something which is rightfully theirs.

I come here to relax and unwind from stopping HMRC trying it on with taxpayers all the day long. Plus ca goddamn change.

Lambs
Posts: 1420
Joined: Wed Aug 06, 2008 3:15 pm

Re: Marriage allowance - HMRC confused

Postby Lambs » Thu Feb 14, 2019 11:47 pm

Hmm. It seems there are 2 pages to this thread...

Dave12335
Posts: 23
Joined: Sat Feb 09, 2019 10:09 am

Re: Marriage allowance - HMRC confused

Postby Dave12335 » Thu Mar 28, 2019 12:29 am

Hi lambs and robbob

I replied to HMRC on 15 Feb saying:

“...Unfortunately, your letter appears not to address the specific circumstances as advised to you. Please could you kindly double-check that the following figures for all my sources of taxable income and my relevant deductions are processed on HMRC’s computer system:

• employment income ​£56,559
• taxable benefits ​​£491
• savings income ​​£355
• dividend income​​ nil
• property income​​ nil

• gift aid payments ​£5,718 (net)
• pension contributions ​£4,000 (net)

I would be grateful if you could confirm that I have been availed of the tax reduction as per ITA 2007 s55B without further delay.

If you are unable to agree the tax reduction is available, I would be grateful if you could have the calculations in my letter of 8 January 2019 checked by a Higher Officer.”

I received a reply dated 21 March saying: “As confirmed in my colleagues letter of 6 February, you are not entitled to receive the Marriage Allowance transfer. The eligibility criteria is based on the rate of tax you are liable to pay tax at. Due to your level of income you will pay some tax at higher rate. The P800 tax calculation issued today under separate cover will confirm this”

I’m confused ! I will wait for the P800 and revert back. Could you kindly confirm I should expect to receive the allowance ?

If not and if possible, I may consider doing a gift aid carry back via a stand alone letter before 5 April. I’m not sure if I will have time given P800 not yet received and postal system ?

darthblingbling
Posts: 269
Joined: Wed Aug 02, 2017 9:09 pm

Re: Marriage allowance - HMRC confused

Postby darthblingbling » Thu Mar 28, 2019 9:19 am

Your taxable benefit figure is the same as everyone else at my firm. Wonder if we work together 😂

Guess you will know more when you see the p800. But couple of questions:

Where are you getting the employment income figure from?
Are the pension contributions your personal pension contributions or are they from your employer?

With regards to Gift Aid carry back, for 2017/18 I believe you may have missed the deadline.

darthblingbling
Posts: 269
Joined: Wed Aug 02, 2017 9:09 pm

Re: Marriage allowance - HMRC confused

Postby darthblingbling » Thu Mar 28, 2019 9:22 am

Apologies in advance if the above questions are insulting as it appears you do know your stuff and I assume you work in the industry?

Dave12335
Posts: 23
Joined: Sat Feb 09, 2019 10:09 am

Re: Marriage allowance - HMRC confused

Postby Dave12335 » Thu Mar 28, 2019 10:13 am

Thanks darthblingbling, yes I’ll wait for the P800.

That’s definitely my personal pension contributions only.

The employment figures are from my P60 (and agree to my personal tax account online).

Surprised the gift aid carry back deadline has passed ?


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