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Computer glitches cost British couples marriage tax break

Technology is great, until it isn't.

Thousands of British husbands and wives discovered that recently, as computer problems prevented them from claiming a marriage tax break.


A spouse or civil partner can transfer up to £1,060 ($1,619 U.S.) of his or her personal tax-free allowance to a spouse or partner who doesn't pay income tax.

The tax shift was estimated to save more than four million U.K. couples and 15,000 civil partners up to £212 ($324 U.S.) a year.

Thousands of eligible couples, however, were unable to take advantage of the tax break, which was to be administered via a separate computer system.

ID theft fears, technology short-comings: Couples were asked to register online to claim the allowance. However, many thought that a follow-up email asking for personal financial details was an identity theft attempt. 

The email asked for credit cards, mortgage, passport or a photo driver's license details in order to verify, not steal, the applicants' identities. Many, however, simply ignored the email.

Of the taxpayers who weren't put off by the questions, many didn't have the necessary info to answer. This was particularly true of older individuals without the acceptable photo IDs.

Still other marriage tax break eligible couples couldn't comply because they didn't have a mobile phone to receive a text message security code required to continue the application process.

In the wake of taxpayer frustration and political criticism, Her Majesty's Revenue and Customs (HMRC) announced it is introducing a new computer system to help couples who cannot use the current one. If the couples continue to have online problems, they will be able to apply directly on the HMRC website or call in a claim.

'No one will miss out on the Marriage Allowance because of difficulties with online verification," assured United Kingdom tax officials. "People can apply at any stage in the tax year and get the full entitlement regardless of when they claim."

U.S. tax computer trouble, too: Across the pond, the United States has been suffering its own series of tax-related computer troubles.

As I noted last week at my other tax blog, the Internal Revenue Service revealed that identity thieves were able to get past tax returns of 104,000 taxpayers by using the agency's Get Transcript online feature.

Bankrate Taxes Blog logoAlso at Bankrate Taxes last week, in light of the Caitlyn Jenner news I examined whether medical costs for transgender patients are tax deductible

My additional tax thoughts usually are posted over at that personal finance website on Tuesdays and Thursdays. If you miss them then and there, check here at the ol' blog over the weekend for highlights and links.

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