Marriage Allowance: Are you eligible?

25th March 2020

As the Covid-19 outbreak begins to tangibly affect personal finances, there may be some good news, as a short HMRC form could potentially result in you receiving a £1,150 cheque.

 

The Marriage Allowance was introduced in 2015, but recent figures reveal that only a small percentage of eligible couples have claimed. With only weeks remaining of the 2019/20 tax year, there is no better time to apply.

 

So, what is the Marriage Allowance? Essentially, the allowance allows a partner in a married or civil partnership couple to transfer 10% of their unused Personal Allowance to their spouse. For example, in tax year 2019/20, £1,250 could be transferred, therefore increasing the Personal Allowance from £12,500 to £13,750, creating a £250 tax saving.

 

So, that is £250 back in your pocket, but I mentioned a potential amount of £1,150? The good news is that HMRC allow couples, who were eligible for the allowance in prior tax years, to back date their claim to the 2015/16 tax year – The savings per year are listed below.

 

2019/20 – £250

2018/19 – £238

2017/18 – £230

2016/17 – £220

2015/16 – £212

 

In order to claim the allowance, the following criteria must be met:

  • You are married or in a civil partnership
  • One partner must have at least 10% of their Personal Allowance unused
  • The other partner must be a basic rate tax payer. ie., for tax year 2019/20, their taxable income must not exceed £50,000

The Marriage Allowance can be claimed for all tax years in which these three conditions are met. Each year is treated separately, therefore if you are not eligible in one year, this does not exclude you from claiming for other years.

 

For 2020/21, the Marriage Allowance will be recognised by adjusting your tax coding notice, but for prior years, HMRC will issue a cheque.

 

If you would like to know more or are unsure if you are eligible, please email your usual Whiting and Partners point of contact.

Other items in Blogs
Ellen Carter
11th August 2022 Revisit your remuneration?

For many SME owner-managed businesses, the tax optimum director remuneration structure for many years has been one of a low salary accompanied by high dividends. This allows Companies to take advantage of low dividend tax rates and, in many cases, no employers national insurance to be paid by the company (if paid at the Secondary…

Jaimie King
10th August 2022 Seeing Double: New Recovery Loan Scheme begins

While one government-backed Recovery Loan Scheme (RLS) ends, another opens.   The previous RLS closed on 30th June 2022, but to follow this the government have introduced a new RLS scheme to support businesses through the out-turn of the pandemic, expected to be accessible after 1st August 2022.   The New Recovery Loan Scheme Government…

Charlie Whittle
10th August 2022 Annual Allowance for NHS pensions

What is the annual allowance? The annual allowance for the 2022/23 tax year is £40,000 and each year this is compared with your pension input amounts. Your pension input is defined as the increase or growth in the capital value of your NHS pension benefits across all pension schemes. Any growth in excess of the…

Jake Day
8th August 2022 TRS Registrations: This deadline may apply to you

  1st September 2022 – This deadline may apply to you!   If you hold property or investments on behalf of another person, HMRC may consider this as a reportable trust arrangement. This may mean that you need to register on the Trust Registration Service (TRS) before 1st September 2022.   New legislation now in…

Megan Turner
4th August 2022 Charity Commission annual return: Planned Changes

The Charity Commission has launched a consultation regarding changes to the annual return.   There are a number of new questions, taking the total questions from 36 to 52, although only 32 will be compulsory. The aim of the new questions is to make the annual return more comprehensive, by gaining information around charity’s income…

Ben Beech
3rd August 2022 MP’s call for Government to Introduce Essential User Rebate

The All-Party Parliamentary Group for Road Freight and Logistics has today (27 July 2022) urged the Government to approve the introduction of an Essential User Rebate of no less than 15 pence per litre for operators within the logistics sector to combat the effects of soaring fuel prices and inflation.   The call has come…