THOUSANDS of married couples could be missing out on a tax break of up to £1,200.
Her Majesty’s Revenue and Customs (HMRC) are urging people to make sure they are making the most of the marriage tax allowance.
Married couples and those in civil partnerships can benefit from the tax relief
The relief allows married couples or people in civil partnerships to share their personal tax allowances.
People can transfer 10% of their tax-free allowance to their partner, reducing the tax they pay by up to £252 a year.
They can apply at any time and, in some cases, could backdate their claims for up to four previous tax years.
This means you could potentially receive tax relief worth up to £1,242.
Unfortunately, not everybody is eligible.
The lower earner in a couple must normally have an income below their personal tax-free allowance – which is currently £12,570.
And the other half of the couple must be a basic-rate taxpayer – so earning under £50,000.
But couples who have been married for years can still qualify.
You can benefit from the Marriage Allowance if all of the following apply:
- You’re married or in a civil partnership
- You do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)
- Your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance
You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.
More than two million couples currently benefit from the allowance.
Even if they don’t initially qualify, a change in circumstances could mean they become eligible – say if one partner retires or takes a career break and the other keeps working.
If a spouse or civil partner has died since April 5, 2018, the surviving person can still claim by contacting the income tax helpline, HMRC said.
How to claim the cash
It’s free to apply for Marriage Allowance – you can do it on the government website.
The person who earns the least should make the claim.
If either of you gets other income, such as dividends or savings, you will need to factor this in.
You can call the IncomeTax helpline if you are unsure on: 0300 200 3300.
Before you apply make sure you and your partner have your National Insurance number to hand.
You’ll also need a way to prove your identity – such as with your passport details.
Once you’ve applied and been accepted, HMRC will give the higher earner in the couple the allowance the lower earner has transferred to them.
They will do this by changing their tax code – this can take up to two months.
Or this can be done when the higher earner sends their Self Assessment tax return.
Meanwhile a quick check that takes only two minutes could tell you if your owed tax back.
And you could still claim hundreds of pounds for working from home in the pandemic – but beware firms that take HALF you cash.