Do you know about the government’s Marriage Allowance tax break? If you are married or in a civil partnership, you could be eligible for this allowance, which could put an extra £1,000 in your pocket.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
What is Marriage Allowance?
Marriage Allowance gives people the chance to transfer part of their Personal Allowance to their spouse or civil partner, resulting in a reduction of their tax by up to £250 a year.
You can backdate your claim to include any tax year since 5 April 2016 that you were eligible for Marriage Allowance. This could be as much as £1,188 if you can claim for the past four years (back to the 2017/18 tax year.)
To qualify for the benefit as a couple, the lower earner’s income must be below the Personal Allowance — £12,500 for the 2020/21 tax year but this will be increasing to £12,570 for 2021/22. The higher earning partner must still be in the basic tax rate band which means their income must be between £12,501 and £50,000.
There is a chance that the lower earner in the relationship might pay more tax individually, but by transferring some of your Personal Allowance to your husband, wife, or civil partner you could still pay less as a couple.
Applying for Marriage Allowance
Applying for Marriage Allowance is free and easy to do. Submit your claim directly through HMRC’s online portal. This will help determine your eligibility and ensure you benefit from tax relief.
If you have applied for backdated marriage allowance relief, you will get a cheque in the post for the amount you are owed, otherwise once your claim is accepted, you will simply be taxed on a smaller proportion of the higher earner’s salary, so the extra money you are due will be paid out with your weekly or monthly pay.
Check in with a specialist tax adviser or accountant for assistance and to take full advantage of all the tax relief available to you.
Need help understanding the Marriage Allowance?
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