Division of tax credits

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Bronte38

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Looking for some broad advice on income tax credits.

My husband and I both work full-time. I earn 77k p.a., he earns 55k. In addition to a PAYE credit, I also have a flat rate expense tax credit and an income continuance tax credit. My husband has nothing other than the usual personal and PAYE credits. It was my understanding that we're both well above any thresholds, and therefore there's no point in transferring tax credits between us. Maybe I have completely misunderstood this. I always left it to Revenue to divide them as they saw fit. But I've recently discovered that my husband is actually in receipt of a greater number of tax credits that I am. I'm confused as to why this would be the case, I've asked Revenue to explain why but I never get a clear answer. They have been dividing the credits so that all 3750 of our personal credits are with my husband. And then some of my flat rate and income continuance credits have also been assigned to him. Is it just wiser to ask for separate assessment? Or by giving him most of my credits, are we somehow making the most of it and paying slightly less tax?

Very confused, and I apologise if this is a very stupid question!
 
Bronte38 said:
Looking for some broad advice on income tax credits.

My husband and I both work full-time. I earn 77k p.a., he earns 55k. In addition to a PAYE credit, I also have a flat rate expense tax credit and an income continuance tax credit. My husband has nothing other than the usual personal and PAYE credits. It was my understanding that we're both well above any thresholds, and therefore there's no point in transferring tax credits between us. Maybe I have completely misunderstood this. I always left it to Revenue to divide them as they saw fit. But I've recently discovered that my husband is actually in receipt of a greater number of tax credits that I am. I'm confused as to why this would be the case, I've asked Revenue to explain why but I never get a clear answer. They have been dividing the credits so that all 3750 of our personal credits are with my husband. And then some of my flat rate and income continuance credits have also been assigned to him. Is it just wiser to ask for separate assessment? Or by giving him most of my credits, are we somehow making the most of it and paying slightly less tax?

Very confused, and I apologise if this is a very stupid question!
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Have a read of this:

Joint assessment

This page outlines joint assessment
www.revenue.ie www.revenue.ie

Note this bit:

If you and your partner both have taxable income, you can use myAccount to allocate your tax credits and rate band however you wish. You will both receive updated Tax Credit Certificates (TCCs) showing the allocation of your credits and rate band. If you do not allocate the tax credits and reliefs, they are all given to the assessable spouse.
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You need to check which of you is considered to be the assessable spouse. It seems as though it's your husband. It might be better if it was you. The above link tells you how to arrange this.
 
Thanks for your guidance Marsupial, I hadn't considered the assessable spouse element. I've previously requested to be the addressable spouse, on 2 occasions since 2018. Perhaps it has defaulted back to my husband again. I'll get this changed.

Protocol, thanks for your input too. I'm aware of how to set out the credits myself via my online PAYE Anytime profile. I suppose I was always fearful of deviating away from Revenue suggestions, as I assumed Revenue would be proposing the most efficient use of credits. That's why I contacted them in the first place, in an attempt to get clarification regarding their splitting of the credits. They don't seem to offer any such thing though.
 
How you split the tax credits doesn't affect the tax taken in total, just the way it is split between the two spouses
 
jpd said:
How you split the tax credits doesn't affect the tax taken in total, just the way it is split between the two spouses
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That's exactly the worry I had. Thanks for the reassurance. I'll adjust the credits here myself, and explain to my husband that harder times lie ahead for him ;)
 
jpd said:
How you split the tax credits doesn't affect the tax taken in total, just the way it is split between the two spouses
Click to expand...
While it is relatively trivial to balance out your tax each year so that you don’t overpay, note that it may not be trivial in the context of pension contributions, for example, particularly if trying to catch up one of your pensions in order to max out tax-free lump sums x2.
 
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