Is There £662 Out There With Your Name On It?
It's simple to claim too ...
POSTED BY JONATHAN VOWLES ON 24/10/2017 @ 8:00AM
Two million couples have failed to claim their share of £1.3bn of marriage allowance relief. Yet getting hold of this money, much of which would be sent to you in the form of a cheque, is simple ...
Two million couples have failed to claim their share of £1.3bn of marriage allowance relief.
copyright: perig76 / 123rf stock photo (licensee)
It takes just a few minutes, so every couple should check whether they are eligible, but figures obtained from HMRC show that the take-up of the marriage allowance is very low.
Perhaps it has passed a lot of people by, but the December 2013 autumn statement announced that the government would be introducing a transferable tax allowance for married couples and civil partners.
Called the Marriage Allowance, this tax break took effect in April 2015, and the government said at the time that more than four million married couples and 15,000 civil partnerships stood to benefit.
It does actually make a difference; when it was introduced this saved couples up to £212 a year and that figure has since risen to £230.
"I would encourage every married couple to check if they are eligible, including checking the past two years as you can back-claim!"
The marriage allowance is specially designed for couples where one partner pays standard rate income tax and the other is a non-taxpayer.
You can claim it provided the following apply:
You are married or in a civil partnership
One partner in the couple doesn't earn anything at all, or their income is £11,500 or less in 2017-18
And the other partner's income is between £11,501 and £45,000 in 2017-18 - or £43,000 if you are in Scotland
If you are eligible, the lower earner can transfer any unused tax-free allowance of up to 10% of the value of the full personal allowance (i.e. £1,150 in 2017-18, because the personal allowance is currently £11,500) to their higher-earning partner.
"This reduces their tax by up to £230 in the current tax year!"
What's more, you can backdate your claim to include any tax year since 5 April 2015 during which you were eligible for the allowance. A couple who claimed now for 2015-16, 2016-17 and 2017-18 stand to gain to the tune of £662. The good news is that any money for previous tax years is likely to be paid in the form of a cheque.
The government has said applying online is simple(!) and can be done at gov.uk/apply-marriage-allowance. It is the non-taxpayer who has to apply, and they will need their own and their partner's national insurance numbers. They will also need a way to prove their identities such as the last four digits of the account that their child benefit, tax credits or pension are paid into, or their passport number and expiry date.
For the current and future years, HMRC will typically give the recipient partner their extra allowance either by changing their tax code or via the self-assessment tax system. Once you have claimed, HMRC should remember this and the lower earner's personal allowance should transfer automatically to their partner every year. And that continues until one of them cancels the allowance or their circumstances change - for example, because of divorce or death.
Importantly, if you or your partner were born before 6 April 1935, you might benefit even more as a couple by applying for the married couple's allowance instead.
This could reduce your tax bill by between £326 and £844.50 a year. You can claim this allowance if all the following apply: you are married or in a civil partnership; you are living with your spouse/civil partner, and one of you was born before 6 April 1935.
"These two tax allowances are simple for you to claim for yourself!"
If you would like some help, or if your tax affairs are more complicated and you need help, then get in touch with me on 01234 752 566 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking for a new accountant to help grow your business, do visit www.jvca.co.uk and discover how Jonathan Vowles Chartered Accountants can help you!
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.