Information about changes to the calculation of payments on account when there is Marriage Allowance
Last updated: 18 Jul, 2016
HMRC are changing the calculation of payments on account when there is a Marriage Allowance transfer. Currently their SA110 notes suggest that payments on account should be calculated on the tax due amount, before applying the Marriage Allowance.
The correct process is explained in the below example
Payments on Account Calculation:
Method as per HMRC's existing guidlines: 50% x (2222.61 less Class 2, if any)
Correct method: 50% x (2010.61 less Class 2, if any)