Marriage Allowance (Again!!!)

Marriage Allowance (Again!!!)

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In calculating payments on account for 2016/2017, should the figure be based on the final outcome for 2015/2016 before or after deducting the £212 marriage allowance for 2015/2016.  I now have in my possession HMRC tax calculations using each of the above possibilities!  Which is correct?

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By emanresu
20th Jul 2016 16:29

Basil, I think that we are not being asked what *should* be done but what HMRC *does*. We're also not being asked about the 'bottom-line tax liability of the "transferee"' for 2015/16 but what will be the payments on account for 2016/17.

The answer to those issues is given in HMRC's own guidance to commercial software providers and it is, I believe, that PoA computation does not take account of MAT received.

As reports we have received suggest that commercial software - and most HMRC assessments - agree that MAT received does not affect PoA - the assumption has to be that the documentation has given an unambiguous brief to both government and commercial software implementers.

It may be wrong - but it is what the commercial software does and, apparently, what HMRC does.

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Replying to emanresu:
By Duggimon
21st Jul 2016 09:58

emanresu wrote:

Basil, I think that we are not being asked what *should* be done but what HMRC *does*. We're also not being asked about the 'bottom-line tax liability of the "transferee"' for 2015/16 but what will be the payments on account for 2016/17.

The answer to those issues is given in HMRC's own guidance to commercial software providers and it is, I believe, that PoA computation does not take account of MAT received.

The answers to those questions are given by HMRC's amended computations which they have started sending out in the last few weeks showing payments on account calculated after the marriage allowance is deducted.

I am well aware that this is counter to the instructions they gave their software providers when the allowance was first introduced but they appear to have changed their minds.

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Replying to fawltybasil2575:
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By emanresu
20th Jul 2016 19:31

fawltybasil2575 wrote:

[1] The OP asks:-

". . SHOULD [my emphasis] the figure be based on the final outcome for 2015/2016".

With respect of course, your comment that:-
"we are not being asked what *should* be done"

is self-evidently incorrect !

That's a bit underhand, Basil. The in-context quote

"I think that we are not being asked what *should* be done but what HMRC *does*"

is NOT self-evidently incorrect.

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