THOUSANDS of married couples may be missing out on a tax break worth a whopping £1,150.
The so-called “marriage tax allowance” is a tax perk for married couples and those in civil partnerships.
It applies to couples where one is a non-taxpayer and the other is a basic-rate tax payer.
But as today marks the start of the new tax year, it sees the amount couples can save using the perk rise from £238 to £250.
Plus, given you can claim back for four previous tax years, which would take you back to when the initiative was introduced in 2015, it also means the overall savings you can make has risen from £900 to £1,150.
And thousands of people could be missing out – figures released by the Government in February show that 700,000 eligible couples had yet to claim the benefit.
Who can claim Marriage Allowance?
TO be able to claim your tax break you need to tick all of these boxes:
- You’re married or in a civil partnership
- Your income is £12,500 or less. This includes people who don’t work.
- Your partner’s income is between £12,500 and £50,000 (or £43,430 if you’re in Scotland)
You can’t claim it if:
- You and your partner live together but aren’t married
- You were born before April 6, 1935.
For more information visit GOV.UK
Here’s what you need to know.
How does the marriage tax allowance work?
The system allows couples to transfer 10 per cent of their personal allowance (the amount you can earn tax-free each tax year) between them in order to reduce their yearly tax bill.
In the new 2019/20 tax year, what this means is that one of you needs to earn under £12,500 and the other needs to earn between £12,500 and £50,000.
As the personal allowance is now £12,500, it means the non-tax paying spouse can transfer £1,250 to their spouse who can add this to their tax-free income.
This means a tax saving of £250.
When the perk was first introduced in 2015, it was worth £212 and the following tax year it was worth £220.
For the 2017/2018 year, the allowance was worth £230 and for the last tax year it was worth £238.
As you claim the previous years’ allowances retrospectively, it means you can get up to £1,150 in total.
How do I apply?
To apply, you need to fill out the form on the Gov.uk website.
The person with the lowest income should be the one to apply.
You’ll need both of your national insurance numbers and a form of ID, such as a passport.
If your partner has died since April 5 2015 you can still claim on their behalf by phoning the income tax helpline on 0300 200 3300.
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Here’s more information on what the marriage allowance is, how you can claim and who is eligible to apply.
Millions of Brits will also get a pay rise this weekend when tax rates rise – and this new calculator works out how much you’ll get.
Plus, are you on the right tax code for 2018/19 tax year? You could be owed HUNDREDS of pounds if yours is wrong.
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News Photo Hundreds of thousands of married couples missing out on £1,150 a year tax perk
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