Marriage Allowance Transfer Timings

Marriage Allowance Transfer, when does it reflect in the higher earnings SA

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Husband and wife both complete Tax Returns via HMRC Self-Assessment website. Wife's 2022/23 tax return completed/submitted and accepted via the website. Request for marriage Allowance to be transferred to husband included in Return and this is reflected in the final tax computation for the wife.

Husband's tax return has been completed but not yet submitted - the tax computation does not show the Marriage Allowance transfer. When does the Alloance show in the husband's calculation? Is there a time delay in it being reflected or does the Return have to be 'submitted' before the Allowance shows in the calculation? (Inclusion of the Allowance will take the liability below £1000 and therefore no payments on account required, if not included may want to make application to reduce payments on account.)

 

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By Not Anonymous
23rd Nov 2023 09:50

You need to submit the return and then the Marriage Allowance credit will be included.

If the husband's liability is less than £1,000 then there won't be any POA for 2023-24 so no claim to reduce could be made.

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By KMACS
23rd Nov 2023 12:01

Thank you for your response. The question of payments on account only arose because the pre-submission liability was more than £1000 (hence POAs) but current year liability was to be less.

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By lionofludesch
23rd Nov 2023 12:02

Why doesn't the MA show in the husband's computation?

Is there a box you still need to tick?

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By KMACS
23rd Nov 2023 12:05

No box to tick on the husband's return - the MA transfer is initiated from the the lower income earners return - in this case the wife.

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Replying to KMACS:
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By lionofludesch
23rd Nov 2023 12:26

KMACS wrote:

No box to tick on the husband's return - the MA transfer is initiated from the the lower income earners return - in this case the wife.

I was thinking more about your software. If the software doesn't know, it won't calculate the allowance.

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Replying to lionofludesch:
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By rmillaree
23rd Nov 2023 12:46

the op must be using hmrc online - the question here (i think) is whether with hmrc online the ma allowance transfer ever shows up as prepped figure before you submit with hmrc online.

issue here could be timing but i wouldnt presume owt - i may be wrong but from memory i dont think you can action the tranfser in via any manner pre submission.

Note op its somewhat irreelevant you can just submit and see what happens if its not there - it always shows up in the end albeit if it does get stuck you may need to chase hmrc.

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Replying to rmillaree:
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By Southwestbeancounter
23rd Nov 2023 14:11

Oh that makes more sense - I was thinking the same as Lion!

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Replying to rmillaree:
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By lionofludesch
23rd Nov 2023 15:34

Ok - well, maybe think about getting some decent software but the bottom line is that you only need to pay what you owe, so POAs not required in this case.

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By richard thomas
23rd Nov 2023 15:46

It is in the tax calculation according to TCSN page 18 box A260. And of course should be as the amount is given effect as a tax reduction at step 6 in s23 ITA 2007.

Despite the rubric for A26o referring to a claim, there is none by the gaining partner, nor by the relinquishing partner who makes an election. The gaining partner has an entitlement if a valid election is made.

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Replying to richard thomas:
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By rmillaree
23rd Nov 2023 15:57

It is in the tax calculation according to TCSN page 18 box A260. And of course should be as the amount is given effect as a tax reduction at step 6 in s23 ITA 2007.

i dont think that fact is in dispute here - i think its more the technicality of whether one should expect the line item to show up before one submits the return - on commercial software it obviously does as you need to tick or not tick - with hmrc it doesnt seem to be 100% clear whetehr it only shows up after you submit or whether there may be a delay in tansfer showing up if it would show up on "draft calcs" hmrc helpline should be able to confirm.

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Replying to rmillaree:
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By lionofludesch
23rd Nov 2023 16:23

It shows up on my tax calculation. There's a question about surrendering 10% with this wording...

"Do you want to transfer 10% of your personal allowance to your spouse/civil partner? If you already have a transfer in place, select 'No' as it will be included in your calculation."

So it does indeed look like HMRC will do the credit at their end once they've time to get round to it. Originally, this was set up when I was submitting SA returns on Taxfiler, so I can't comment on a first year on HMRC software.

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Replying to rmillaree:
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By richard thomas
23rd Nov 2023 22:09

I was answering the OP’s first question.

I am very surprised that commercial software gives you a place to enter the transferred allowance but HMRC’s online return doesn’t. I thought they were bound to follow the HMRC return and calculation exactly.

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Replying to richard thomas:
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By Not Anonymous
24th Nov 2023 07:20

richard thomas wrote:

I was answering the OP’s first question.

I am very surprised that commercial software gives you a place to enter the transferred allowance but HMRC’s online return doesn’t. I thought they were bound to follow the HMRC return and calculation exactly.

Marriage Allowance is dealt with in a slightly odd way by HMRC.

As the recipient cannot claim it there is nowhere for them to put anything on the Self Assessment return, HMRC add the recipients credit to the calculation after the return has been submitted.

But some (all?) software companies provide the option to include the MA tax credit so you can see what the end result will be once HMRC have updated the SA302 with the MA credit.

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Replying to richard thomas:
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By rmillaree
24th Nov 2023 09:37

"I am very surprised that commercial software gives you a place to enter the transferred allowance but HMRC’s online return doesn’t. I thought they were bound to follow the HMRC return and calculation exactly."

They do follow the calculations exactly in theory - the system does works , but rightly so WE make the decision and hmrc normally follow suit - this allows us to take the lead if transfer is needed and hmrc update. This process isnt perfect though so we can have our calcvs out of alignment with hmrc - if thats the case normally hmrc catch up but sometimes we need to amend our calcs - if for example we have presumed there is a transfer in to our client but the spouse form whatever reason doesnt do it. It would be a nightmare if we couldnt take the lead here and had to wait for hmrc to provide us with calkcs we need (now)

I cant speak for how hmrc how their systems work but as not anonymous has advised i think hmrc online probably does allow transfers but i presume it can only be done on transferors return - the receivber here is silent. That probably wokr best for the way hmrc work - albeit it may annoy the op if they want theit full calc "now" and cant get it like we can.

Either way sometimes its a bit of hassle getting where you want to be - hmrc ridiculous rule that you cant cancel transfers setup in advance sometimes doesnt help as that means us agents neeed to be extra cautious when we try and predict teh future - even if we know its highly likley transfer will probably be best each year - we never know that for sure until near or after the end of the year.

Really hmrc should with class2NI (start stop se dates) and marriage transfers just allow us agents to dial in and flip the switch on or off at will (within allowable timelimits) and get hjob done oline in 2 minutes. HMRC must spent 10's of milllions manning an class2NI system backoffice that is not fit for purpose - half the time hmrc cant even explain how why an class2i stop notice was generated.

There is an online notification system ref class2 that is worse than hopeless any mismtch in details just generates a "no can do" message that is uncessary - if we have client in agnet area we wouldnt have to provide any unecessary details - just start stop dates and possibly note if necessary.

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Replying to rmillaree:
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By Tax Dragon
24th Nov 2023 09:47

In the real world, where most people don't need accountants, MA is often coded out... which needs advance notice.

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