How do the Revenue work out my married couples allowance (MCA) on my coding notice?
• For 2009/10 the rate of MCA where either spouse or civil partner was born before 6 April 1935 is £6,965 MCA @ 10% = £696.50 • If you are 75 at any time in the tax year you will get the allowance for the whole of that year. • The allowance is set annually and is different from a personal allowance as it does not reduce your income, but is used to calculate an amount to come off your tax bill. • 10% of the allowance set for a year be taken off your tax bill. So for 2009/10 as the allowance is £6,965, so £696.50 can be deducted. • If you are a basic rate (20% taxpayer) – you will be getting your married couple’s allowance allowed at 20% in your coding notice. However as we have already seen you are only entitled to tax relief of 10%. To stop you underpaying tax, the Revenue put a restriction in your coding notice. For 2009/10 the restriction is £3,483. So the allowance given in your coding works out like this: £(Allowance 6,965 – restriction 3,483) = £3,482 x 20% = £696.50 • If you are
