This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Marriage allowance - HMRC confused

D&C
Posts: 61
Joined: Thu Dec 22, 2016 10:04 pm

Re: Marriage allowance - HMRC confused

Postby D&C » Sat Mar 30, 2019 12:51 am

I think you have resolved this now. The HMRC staff dealing with this appear to be unaware of how their own systems work.

Gift Aid is added to the PAYE system as a net figure whilst personal pension relief (a relief at source payment) has to be grossed up first.

Presumably having both things to enter has confused the operator and they have added both as net figured in error.

You can refer them to their own guidance - link below -and ask for the correct PPR to be included in the calculation.

I don't know whether that on its own is sufficient to bring back the Marriage Allowance but it is at least a starting point where there will presumably no longer be any higher rate liability.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye130025

robbob
Posts: 2836
Joined: Wed Aug 06, 2008 4:01 pm

Re: Marriage allowance - HMRC confused

Postby robbob » Sat Mar 30, 2019 11:38 am

HMRC sloppy procedures / loose wording and lack of attention to detail make a noose for their own neck in this regard - if its spelled out to them gross/tax/net with regard to pension contributions made personally they don't generally get it wrong and if the letter contained gross tax and net amounts with regard to pension contributions made in writing i would think they would very rarely get it wrong.

However give them a chance to get it wrong by saying i want relief for pension contributions paid of x and they will often interpret x as being the grossed up payments and not what you have paid in cash terms.

It''s all that silly that if you complete a tax return you enter the gift aid payments net (payment made) and the pension payments made on a grossed up basis (net payment +25% of that total) - it's not surprising that everyone gets confused.

Anyway nice to see that you are only one step away from victory :D :shock: :D , a quick phonecall and they will on request amend the basic rate extension for pension contributions by the "grossed up sum" rather than the net sum paid. This will magically being in the marriage transfer request too unless the transfer request has been cancelled rather than simply being rejected. They should be able to confirm the revised calcs while you are on the phone :)

Well done for your perseverance in this regard.

Dave12335
Posts: 26
Joined: Sat Feb 09, 2019 10:09 am

Re: Marriage allowance - HMRC confused

Postby Dave12335 » Sat Mar 30, 2019 2:37 pm

Success !

As suggested by robbob, i called up and asked them to process the GROSS pension contributions and then reprocess the marriage allowance transfer ( for which they wanted confirmation from my spouse on the phone ).

It worked ! New P800 coming in the post showing corrected liability plus new tax code for 18-19. we’re now better off by £411 :D

Many thanks to all of the helpful people on here who helped, it’s greatly appreciated.

Lambs
Posts: 1426
Joined: Wed Aug 06, 2008 3:15 pm

Re: Marriage allowance - HMRC confused

Postby Lambs » Sat Mar 30, 2019 5:02 pm

D,

Delighted to hear that you have finally gotten HMRC to see sense. But the effort involved is worrying, and may be one of the reasons why takeup of the new "Marriage Allowance" is lower than expected. One of my personal bugbears was the ridiculously poor guidance issued by HMRC to promote the TTA, and how it was hard to credit that it was so consistently misleading by accident.

Anyway, a good result, and well-earned. Best wishes to all involved,

Lambs

njb55rtd
Posts: 5
Joined: Thu Apr 01, 2010 9:42 am

Re: Marriage allowance - HMRC confused

Postby njb55rtd » Sat Apr 06, 2019 6:14 pm

Now that particular issue is sorted, can I ask another, simple, question in respect of the MA?
My intended income this year is £50000 gross, from pension income. Other half's income is 0. MA transfer has been approved for the last 3 years.
So I have submitted to the HMRC, through my account, those figures and received the following.

Income you don't pay tax on £13750 (I get that - £12500*1.1)
Income you do pay tax on £36250 (I get that too - £50000-£13750)
Income tax estimate £7250 (happy with that as well)

It then goes on to say "you can earn £1250 more before your income tax reaches the next band"
Does that mean that my upper tax band now starts at £51250?
Apologies if this has come up before.

Nick

robbob
Posts: 2836
Joined: Wed Aug 06, 2008 4:01 pm

Re: Marriage allowance - HMRC confused

Postby robbob » Sun Apr 07, 2019 11:18 am

It then goes on to say "you can earn £1250 more before your income tax reaches the next band"
Does that mean that my upper tax band now starts at £51250?
Apologies if this has come up before.
No the marriage transfer NEVER changes the calculation of where higher rate tax starts - 50k it is for you.


I am not sure why are saying what they are saying if i am being honest and what it means exactly - perhaps they are simply trying to "confirm" that your can earn 1250 more than the 12,500 personal allowance before the first basic rate tax charge kicks in - as ever with hmrc it looks like they are trying to confuse when there is no need to be confusing :)


Return to “Income Tax”