Eligible spouses or civil partners can claim the Marriage Allowance for the current tax year and also for the four previous tax years. This can give a tax reduction to the recipient of more than £200 per year.
The Marriage Allowance was introduced from 6 April 2015. While it is possible to claim for all relevant years now, LITRG warns that from 6 April 2020 the ability to claim the allowance for the earliest year, 2015/16, will be lost since claims may only be made for the current tax year and the four previous tax years.
Victoria Todd, Head of LITRG, said:
“It is fairly easy to claim the Marriage Allowance and this could make you more than £1,000 better off. We encourage married couples and civil partners to review their tax affairs and consider whether they should make a claim.”
The Marriage Allowance allows one member of the couple – normally the member with the lower income – to give up 10 per cent of their personal allowance for the tax year. As a result, their spouse or civil partner receives a tax reduction.1
For example, for the current tax year the personal allowance is £12,500. One member of the couple may give up £1,250 of their personal allowance and their spouse or civil partner gets a tax reduction of £250 (20 per cent of the allowance given up). It is important to note that the recipient does not see an increase in their own personal allowance as a result, it simply reduces their tax liability. This can make a difference when considering the tax rate applicable to the other income of the recipient.
Neither member of the married couple or civil partnership must be liable to pay tax at a rate higher than the UK basic rate (or Scottish intermediate rate if resident in Scotland). Also neither member of the couple should have been born before 6 April 1935. If one of the couple was born before that date, they would most likely be better off claiming the Married Couple's Allowance.2
Victoria Todd continued:
“It is the person giving up part of their personal allowance who must make the claim. They will need their own and their spouse’s National Insurance number. They should be able to find this on any communication from HMRC, a payslip or a letter from the DWP, for example.
"We are aware that some companies offer to make these claims for a fee, but HMRC have tried to make this as easy as possible for people to do themselves. There is a relatively straightforward online facility to do this on the Gov.UK website. If an online claim is not possible, all they need to do is to contact HMRC,3 either by phone or in writing, and say they want to make the claim and for which years."
Notes for editors
Marriage Allowance lets you give up £1,250 of your Personal Allowance in 2019/20 while your husband, wife or civil partner can reduce their tax bill by up to £250 in the tax year (6 April to 5 April the next year). More from HMRC here.
See LITRG website here.
Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk
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