Marriage Allowance Reclaim?

Hi, I have transferred part of my Personal Allowance to my wife for several years because my earnings were below the threshold. But, because of the effect of the pandemic on her business, for the year 2022/23 my wife's earnings fell below the threshold. At the same time, my earnings rose above the threshold. This resulted in me paying more tax than I would have if I hadn't transferred my allowance. Because my wife is self-employed, I didn't know her earnings fell below the threshold until she submitted her tax return this month (June 2023). I have cancelled the transfer of my allowances but the cancelation will not take effect until 6 April 2024. So, potentially, the same could happen this year and I will be paying more tax than I would have. Because the information on my wife's tax wasn't available until after the beginning of the tax year, am I able to get a refund for last year? And can the effective date of the cancellation of the transfer of allowances be back-dated to the beginning of this tax year (2023/24)?

Hi,

If your wife contacts us to advise that it needs to be cancelled for 2022 to 2023 as she was below the threshold we will be able to cancel it.

Income Tax: general enquiries

Thank you.

After claiming for marriage allowance, my husband received a letter a few months ago, stating we were not eligible as neither of us pay tax. Despite telling us we're not eligible for marriage allowance, HMRC have transferred £1260 of my allowance to my husband, who doesn't pay tax! I wrote to HMRC, but they tell me we have to wait until April 2024 to cancel it. However, I have just started a new job and this will impact on my tax payment for the rest of the tax year. Please advise. Thank you.

Hi Angela Watkins,

If your husband contacts us and advises that he is a non taxpayer and you need the allowance, we will be able to cancel this now
Income Tax: general enquiries

Thank you.

Hi , I am the high earner my code changed last April when I applied for a refund but still nothing received , I can see it’s applied for on my self assessment. But nothings seems to be happening? It’s like 9 months ago

Hi gazza Peters,
You will need to contact HMRC to access your record to check this for you:
Make a subject access request to HMRC.
Thank you. 

 

It would appear that Marriage Allowance cancelled by the 'donating' spouse during a tax year will still be applied for that year and only then cancelled for later years. Why is this - when a decision on the need to cancel may only be possible after respective incomes are known, late in the tax year or afterwards? Surely it should be possible to cancel the transfer at any time before assessments are confirmed?

Hi Puffer,
If the Marriage Allowance is cancelled due to a change in income then the allowance transfer will run until the end of the tax year.
Details of changes of circumstances here:
Marriage Allowance

Yes, that is what the notes say - but why cannot the transfer be cancelled for the year in which this is requested? Maintaining the allowance when no longer needed (usually because income changes) can easily create a problem.

It transpires that my husband became ineligible to receive Marriage Allowance in the tax year ended 5/4/24, but £1260 was still deducted from my Personal Allowance. I am thus being overtaxed for that year. How do I get that corrected?

Hi Puffer, not HMRC Admin but think I can offer an explanation. The law basically says where notice to cancel is given, it takes effect from the next tax year. As explained by para (6) in the link below. But, as detailed in para (3), if you wait until the tax year is over before making an election for that tax year, the election is only for that one tax year and does not carry forward. So if you don't know whether the transfer will be of benefit or not, you may want to wait until the year has ended and you do know before either of you apply.

I forgot to include the link: https://www.legislation.gov.uk/ukpga/2007/3/section/55D

BellaBoo: Thank you, but I had already seen the legislation, which is of no comfort! I can see that withdrawal of an election is only effective from the following tax year - but WHY does this limitation exist? It seems that taxpayers are to be assumed to have crystal balls and thereby to know what their income will be for the next tax year, in order to decide before it starts whether an election is to continue. The ability to make a new election that is to apply currently or retrospectively is of no relevance where an unwanted election is already in force.

Hi Puffer, I can't say why it exists sadly and I don't think HMRC can either since they don't write the legislation. At a guess, they didn't want HMRC to get bogged down in disputes between spouses and the admin costs (of enacting the transfer, then cancelling, then recovering the underpaid tax) would likely be too erroneous.

Hi
We can only cancel marriage allowance in the current year under certain circumstances - if you or your spouse become a higher rate tax payer, if you are claiming Married Couples Allowance, or if you divorce or legally separate from your spouse/civil partner. Cancelling the transfer of allowances will result in an underpayment for the partner who they had previously been transferred to, which then has to be collected by HMRC, which may be inconvenient and potentially stressful for that partner. Keeping the transfer of allowances in place until the end of the tax year may result in an increase in tax for the transferor, but will usually also mean an exact corresponding decrease in tax for the recipient. As such, the transfer is kept in place until the end of the year for the convenience of the applicants.

Hi kaustin

The cancellation of that transfer should happen automatically, and you tax calculation for 23/24 will usually reflect that.
If the transfer of allowances is still present in your calculation, contact us by webchat or phone via Income Tax: general enquiries, and we can advise you further.

Thank you

Hello, My husband is receiving Marriage Allowance but he lost his job. Obviously he isn't receiving the tax relief now, but I am still paying increased tax. Is there anything I can do?

Hi,

Please see the guidance at:

Marriage Allowance

Thank you.