Married tax credits

Redriddick

Hi guys,
I know this has been asked a thousand times but me and my wife are jointly assessed. Our earnings are me 44,000 and my wife 23,000. I currently have all the tax credits with my wife keeping her personal credits. Will my wife take home more pay if I give her back some of the credits, or what is the best way to divide them. Using my account on revenue and using the divide credits it keeps them as is.

relax carry on

Redriddick wrote: »

Hi guys,
I know this has been asked a thousand times but me and my wife are jointly assessed. Our earnings are me 44,000 and my wife 23,000. I currently have all the tax credits with my wife keeping her personal credits. Will my wife take home more pay if I give her back some of the credits, or what is the best way to divide them. Using my account on revenue and using the divide credits it keeps them as is.

You don't have all her tax credits. You have personal tax credit of 1650. She has her paye credit of 1650. You can give her back her 1650 personal tax credit and she will pay 1650 less tax. You however will then pay 1650 more tax.

How are your rate bands split? Your wife can give you up to 9000 euro of her rate band still be grand as she's not using it based on her income of 23000.

Redriddick

relax carry on wrote:

You don't have all her tax credits. You have personal tax credit of 1650. She has her paye credit of 1650. You can give her back her 1650 personal tax credit and she will pay 1650 less tax. You however will then pay 1650 more tax.

Thanks for that. I will look at the rate bands tomorrow. Basically if I transfer the 1650 credit back to her I will have to pay it. Do the rate bands make any difference??

namenotavailablE

The rate bands determine the portion of your total salary on which you pay 20% PAYE. So, you would save [amount transferred from your wife to you] x (40% high rate of PAYE - 20% standard rate PAYE).

It's likely that you are both on a standard rate band of €35300 in 2019. However, your wife only needs €23000 to cover her income so she can transfer some of the unused portion to you- the maximum possible transfer is €9000 but you'd only need €8700, being the difference between your income of €44000 and the standard rate band of €35300.

Redriddick

namenotavailabl wrote:

It's likely that you are both on a standard rate band of €35300 in 2019. However, your wife only needs €23000 to cover her income so she can transfer some of the unused portion to you- the maximum possible transfer is €9000 but you'd only need €8700, being the difference between your income of €44000 and the standard rate band of €35300.

Thanks. Of course I tried logging in to my account now and it's not working. My wife is starting a new job tomorrow so we want to get it sorted asap.

Redriddick

namenotavailabl wrote:

The rate bands determine the portion of your total salary on which you pay 20% PAYE. So, you would save [amount transferred from your wife to you] x (40% high rate of PAYE - 20% standard rate PAYE).

So I checked the rate bands and it's rate band 1 = €70,664.00

namenotavailablE

That's the total for the two of you.

Does it show the split between yourself and your spouse? That's what you're looking for. Allocate €23000 to your wife and the remainder (capped at your annual earnings) to yourself.

Redriddick

namenotavailabl wrote:

Does it show the split between yourself and your spouse? That's what you're looking for. Allocate €23000 to your wife and the remainder (capped at your annual earnings) to yourself.

It shows 20% yearly 26300 for my wife and me 20% yearly 44364.

namenotavailablE

That seems a more or less optimal split. You seem to have some slight extra amount over the normal €44300 which could be due to an 'expense increase' but nothing that requires changing.

Redriddick

namenotavailabl wrote:

That seems a more or less optimal split. You seem to have some slight extra amount over the normal €44300 which could be due to an 'expense increase' but nothing that requires changing.

Thanks a million namenotavailabl. I will have to ring revenue to give my wife back her credits as I can't see where to do it online. The 1650 works out at about 31.73 per week extra I will have to pay.

Redriddick

Redriddick wrote:

Thanks a million namenotavailabl. I will have to ring revenue to give my wife back her credits as I can't see where to do it online. The 1650 works out at about 31.73 per week extra I will have to pay.

So I get a call from HR saying revenue are taking over 600 euro in paye from my forthrightly pay. I am shocked...

namenotavailablE

Did HR indicate why?

It sounds like some sort of 'Emergency rate' has been charged which could only arise if your employer doesn't have Revenue Payroll Notification data downloaded ( basically tax credit & standard rate band data for you which is downloaded by your payroll department before processing pay).

Could the tax credit changes between yourself and your spouse have somehow been done incorrectly?

Redriddick

namenotavailabl wrote:

It sounds like some sort of 'Emergency rate' has been charged which could only arise if your employer doesn't have Revenue Payroll Notification data downloaded ( basically tax credit & standard rate band data for you which is downloaded by your payroll department before processing pay).

I rang revenue and they said they never put me on a week 1??
Don't know what this is?
Asked herself and she said she got tax back last week....

namenotavailablE

Week 1 is not the normal cumulative basis- it's sometimes used when Revenue don't have some piece of information about your tax status.

You probably need to ask Revenue why it was used and try get it set to Cumulative or Normal.

Redriddick

namenotavailabl wrote:

Week 1 is not the normal cumulative basis- it's sometimes used when Revenue don't have some piece of information about your tax status.

She said if I was on the week 1 I would not be paying in one big lump.
I told her that when I rang last week to give my wife back her 1650 credits I was told that I would have to pay that at approx 32 euro per week. Have they made me pay the while 1650 back dated to the start of the year. Only explanation I can come up with. Feck up mortgage payments and other thing if they take the lump ffs

Redriddick

The issue has been sorted by placing me on a week 1 basis. Thank God for that.

spuddy

Redriddick wrote: »

It shows 20% yearly 26300 for my wife and me 20% yearly 44364.

Hope it's ok to resurrect an on old thread, I'm trying to figure out how to do the same and can't see any option on MyAccount to transfer "spare" bands between spouses?

relax carry on

spuddy wrote: »

Hope it's ok to resurrect an on old thread, I'm trying to figure out how to do the same and can't see any option on MyAccount to transfer "spare" bands between spouses?

It's in Manage your tax 2020 section of Myaccount.

NearlyForty

spuddy wrote: »

Hope it's ok to resurrect an on old thread, I'm trying to figure out how to do the same and can't see any option on MyAccount to transfer "spare" bands between spouses?

And they appear to have a back log at the mo as it’s the start of the year. What can normally take 1-3 working days, it’s taking almost 3 weeks