Joint or Separate Assessment

tiredblondie · 04-11-2019 3:15pm #1

Hi
Not sure if this is the right place to post this (or even if this is allowed!)

Recently married and looking to update ROS with new status.
I'm not sure which is better or if there are even any differences, but i can't decide between Joint or Separate Assessment - what exactly is the difference between the two?
Does my PPS number change with both?
Can tax credits if one of us is out of work be transferred on both?

We are both in the higher tax bracket so i am aware there is no benefit there.....

I did ask revenue about it but they said they can't give advise on it.

gerbilgranny · 06-11-2019 12:13pm

Revenue can't advise you as to which Basis of Assessment to choose. However, I think it's in order for them to let you know that Joint Assessment means it's possible for you and your spouse to transfer credits, rate band etc, during the year. Separate Assessment means you stay separate during the year, but at the end of the year you can request that any unused credits, rate band etc, be 'transferred' - i.e. your liability under joint assessment will be determined, and if that had been more advantageous, the difference will be refunded to you.

(With joint assessment, both spouses can choose to have the same credits as they would if they were separately assessed - it's up to the taxpayers as to how they want their credits and rateband distributed).

Separate Treatment is a different kettle of fish altogether. Can't transfer, ever.

Nobody's PPS number changes now as a result of marriage - it is imperative that everyone has their own individual number - whereas years ago married women had to use their husband's number with a 'w'.

There's actually a great deal of information, including examples of how the different bases of assessment work, on the revenue website - you just have to keep clicking from page to page for more information.

tiredblondie · 06-11-2019 12:59pm

gerbilgranny wrote: »

Revenue can't advise you as to which Basis of Assessment to choose. However, I think it's in order for them to let you know that Joint Assessment means it's possible for you and your spouse to transfer credits, rate band etc, during the year. Separate Assessment means you stay separate during the year, but at the end of the year you can request that any unused credits, rate band etc, be 'transferred' - i.e. your liability under joint assessment will be determined, and if that had been more advantageous, the difference will be refunded to you.

(With joint assessment, both spouses can choose to have the same credits as they would if they were separately assessed - it's up to the taxpayers as to how they want their credits and rateband distributed).

Separate Treatment is a different kettle of fish altogether. Can't transfer, ever.

Nobody's PPS number changes now as a result of marriage - it is imperative that everyone has their own individual number - whereas years ago married women had to use their husband's number with a 'w'.

There's actually a great deal of information, including examples of how the different bases of assessment work, on the revenue website - you just have to keep clicking from page to page for more information.

That's great, thank you so much for that information - yes, i saw all the information on the website but it just confused me and i wanted it in basic english (which was why i asked revenue for advise which they wouldn't offer!)

I did think that seperate assessment meant i could still transfer credits though - that's what was confusing me trying to work out what the difference was between joint and seperate!

As we are both on the higher tax bracket, i understand it won't make any difference to either pay packet - do i manually have to allocate our credits via ROS?

My main reason for asking about transfering credits is, i am due to have an operation next year which could have me out of work for up to 3 months - i thought then it would be better to transfer my credits to himself during this period so that his pay would be up during that time.
If i leave it as seperate, are you saying that come the end of the year, i can request a refund?
TBH, i thought that once you returned to work after being out, you paid less tax in the subsequent pays until it's balanced off?!

gerbilgranny · 06-11-2019 9:09pm

Yes, if you're not earning for part of the year, and then return to work, your tax credits and rate band will 'stretch further', i.e. you will have 12 months' worth to apply to 9 months' income. If your time of not working occurred late in the year, you might not get the full advantage - but at the end of the year, a review would sort things out. And I think such a review will be automatic from this year, with PAYE modernisation, and the demise of P60s.

If you're jointly assessed, you can just move the credits around (or ask if Revenue will do it) at any stage of the year.

If you're separately assessed, you can ask for a review of your joint tax liability after the end of the year so that any unused but transferable credits and rate band can be distributed between the two spouses to reduce your liability.

And if you were on Separate Treatment, you can still of course get a refund at the end of the year if you've overpaid tax as a result of not earning for part of the year, but you and your spouse's tax affairs remain completely separate.

tiredblondie · 06-11-2019 9:47pm

That's brilliant, thank you so much for your help x

Elwood_Blues · 10-12-2019 12:59pm

To be honest I'm still having trouble working out how to calculate this. Is there any revenue calculator out there where I can enter both mine and my wife's salary to calculate the benefit (if any)?

Looptheloop30 · 02-01-2020 6:21pm

gerbilgranny wrote: »

Separate Assessment means you stay separate during the year, but at the end of the year you can request that any unused credits, rate band etc, be 'transferred' - i.e. your liability under joint assessment will be determined, and if that had been more advantageous, the difference will be refunded to you.

From my reading of above and revenue website, a recently married couple, ie my own situation, where one earns circa 45k and the other 25k,going with separate assessment keeps our current pay packets the same with a lump sum of a thousand or so refunded after balancing statements are applied at year end?

Am I missing something picking that method over joint assessment??

appledrop · 02-01-2020 6:27pm

There is no benefit to joint assessment if you both earn higher tax band. We never bothered changing + prefer separate assessment.

I'd only change if one of you planning on taking unpaid maternity/paternity leave etc when you could use some of each others tax credits.

duffman13 · 02-01-2020 10:10pm

A little confused here, got married in March and registered with Revenue in April for me to get more tax credits and be jointly assessed. My wife was on unpaid mat leave for 7 months and returned to work part time so only earned circa 20k for the 5 months. When I log on to submit a tax assessment on the revenue site, I am not seeing any of her details. Should I just submit or should I be able to see both of our details if jointly assessed?

relax carry on · 02-01-2020 10:44pm

duffman13 wrote: »

A little confused here, got married in March and registered with Revenue in April for me to get more tax credits and be jointly assessed. My wife was on unpaid mat leave for 7 months and returned to work part time so only earned circa 20k for the 5 months. When I log on to submit a tax assessment on the revenue site, I am not seeing any of her details. Should I just submit or should I be able to see both of our details if jointly assessed?

In the first year of marriage, you are treated as single people so you won't see her details. You can request a year of marriage review via MyEnquiries and you'll be able to see her details from 2020 onwards.

duffman13 · 02-01-2020 10:46pm

relax carry on wrote: »

In the first year of marriage, you are treated as single people so you won't see her details. You can request a year of marriage review via MyEnquiries and you'll be able to see her details from 2020 onwards.

Thanks, I will submit so and do an Equiry. Thanks

Tinkerbell4484 · 03-01-2020 12:49pm

my Husband works full time & I have just started work after being at home with the kids for many years. I work 6 days/ fortnight and paid fortnightly. My husband is full time but would earn around €25000 per annum.
Is joint assessment a good option for us or is single assessment better?
I paid 1/3 of my income in tax today so would appreciate any advice

relax carry on · 03-01-2020 5:20pm

Tinkerbell4484 wrote: »

my Husband works full time & I have just started work after being at home with the kids for many years. I work 6 days/ fortnight and paid fortnightly. My husband is full time but would earn around €25000 per annum.
Is joint assessment a good option for us or is single assessment better?
I paid 1/3 of my income in tax today so would appreciate any advice

What do you expect to earn gross for the year? Will need that to be of any help. Are you currently jointly assessed? When did you get married? Also when you login to your Revenue account, can you see your employment registered with Revenue?

Tinkerbell4484 · 03-01-2020 5:29pm

relax carry on wrote: »

What do you expect to earn gross for the year? Will need that to be of any help. Are you currently jointly assessed? When did you get married? Also when you login to your Revenue account, can you see your employment registered with Revenue?

I will earn around €13000 for the year. Got married in 2009, I phoned revenue and they claimed my tax was so high as we were still down as having home Carers tax credit? My income is registered on my revenue but under my documents I cannot see a tax credit very for me just my husband

relax carry on · 03-01-2020 5:42pm

Tinkerbell4484 wrote: »

I will earn around €13000 for the year. Got married in 2009, I phoned revenue and they claimed my tax was so high as we were still down as having home Carers tax credit? My income is registered on my revenue but under my documents I cannot see a tax credit very for me just my husband

You are already jointly assessed with Revenue and your spouse has been in receipt of the home carers tax credit which was beneficial while you weren't working.

You need to allocate your credits as to cover your 13000.

You'll need all of your 1650 employee credit and 950 of your personal credit back from your spouse to cover the 13000 without paying PAYE. Your spouse will have to delete the home carers tax credit as you aren't entitled to that from 2020 onwards. Your rate bands can be split 50/50 between you.

The sooner the better you make these changes.

Tinkerbell4484 · 03-01-2020 6:02pm

All of the above was done over the phone at lunch time with revenue.
So will both my & my husbands employers get a new tax credit cert with the new details? As I don’t think my employer received any at all

relax carry on · 03-01-2020 6:57pm

Tinkerbell4484 wrote: »

All of the above was done over the phone at lunch time with revenue.
So will both my & my husbands employers get a new tax credit cert with the new details? As I don’t think my employer received any at all

Yes, both your employer's will get an updated RPN which will allow them to tax you correctly.

cduggan999 · 04-07-2020 1:01am

appledrop wrote: »

There is no benefit to joint assessment if you both earn higher tax band. We never bothered changing + prefer separate assessment.

I'd only change if one of you planning on taking unpaid maternity/paternity leave etc when you could use some of each others tax credits.

Really? I thought with joint assessment one partner will get the lower rate band up to €44,300 whilst the other would get it up to €26,300 compared to €33,800 for both if assessed separately. So whilst you would benefit from €6,500 @20%; for one partner you'd lose out by paying an extra 40% on €10,500 instead of the 20% if seperately assessed. So basically you would be paying an extra €800 (20% of €4000(10,500 -6,500)).

Or is this not how it works?

IRtax · 04-07-2020 11:24am

The op said both are in the higher tax band over your 35300 cut off so no spare allowances or cut offs.
If one spouse is earning below the threshold then you can transfer spare allowances for tax benefits

cduggan999 wrote: »

Really? I thought with joint assessment one partner will get the lower rate band up to €44,300 whilst the other would get it up to €26,300 compared to €33,800 for both if assessed separately. So whilst you would benefit from €6,500 @20% for one partner you'd lose out by paying an extra 40% on €10,500 instead of the 20% if seperately assessed. So basically you would be paying an extra €800 (20% of €4000(10,500 -6,500)).

Or is this not how it works?

Tony_TwoLegs · 06-10-2020 9:46pm

Trying to figure this taxation out. I was in FT education for a year. My wife worked and took all my tax credits. She is on c.60k.

I'm started work in July (PT) on approx 30k a year [15k for 2020 in total so].

I note my tax credits ran out and I'm being taxed at 40% after c.€500 a week.

I'll leave her keep my credits under Joint for the rest of 2020 but I want to move to Separate in January. Ie reclaim my half of the credits.

Is this folly?

Tenger · 06-04-2021 9:34am

Apologies for the late addition to this thread.

Am in a somewhat similar situation.
Myself and the missus have been together for years now. Married in 2018 but changing our tax situation was one of those things that I never got around to.
So we were both essentially single people for Revenue.

Wanting to change that status now. (about time)
Mostly based on the fact that I took a large hit to my income in 2020 and expect similar this year.

My wife earns €65K gross. I used to be on €55K. In 2020 my gross salary was €35K with €6K from Social Welfare scheme.
I expect maybe €45 total this year with hopefully a return to €55K in 2022 if the company is still there. (aviation worker)

My reading is that 'joint assessment' seems to be the way to go based on tax credits sharing.
'Seperate assessment' only allows this to happen at the end of the year.

Joint or Separate Assessment

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