Marriage allowance or Marriage tax allowance? - Leonie Knows
So what actually is Marriage Tax Allowance?
If you are married or living in a civil partnership; you could be entitled to a tax break of £1,188 this is what is classed as the marriage tax allowance or married tax allowance. Millions of couples from the UK are missing out on this benefit which can reduce the amount of income tax you pay.
What is Marriage Tax Allowance and who qualifies for a marriage tax allowance?
Qualifying for the HMRC marriage allowance; allows the lower income earner in a marriage or civil partnership to transfer £1260 of their personal allowance to the higher-earning partner. (the £1260 figure provided is the amount you can earn tax-free each tax year).
Once a claim is successful; the higher earners' tax bill is reduced for the year and future year, you can also look to claim this marriage tax allowance for previous years up to 4 years before the claim date.
Who qualifies for this marriage tax refund and or this marriage tax claim?
Only certain people with specific circumstances can look to claim this marriage allowance you must:
- Be married or living in a civil partnership - ( if you are not married or in a civil partnership and are just living together. you will not qualify for the HMRC marriage allowance)
- The lower earner needs to be a non-taxpayer - (This is where the lower earner in the marriage or civil partnership will earn less than the personal allowance of £12570 between the tax year 6th April 21 - 5th April 22)
- The higher earners need to be paying basic 20% tax on their income - ( if you earn more than £50270 in England or £43662 in Scotland you will not qualify for the HMRC Marriage Tax Allowance)
- Both Partners must be born after the 6th April 1935
The current marriage tax allowance is worth approximately £252. however, you can look to backdate a claim to include previous years; different years are worth different amounts but a claim can be backdated as far as 6th April 2017. the amounts for each year are listed below:
- 2021/22 – £252
- 2020/21 – £250
- 2019/20 – £250
- 2018/19 – £238
- 2017/18 – £230
Backdating your marriage tax claim for four years will entitle you to approximately £1220.
the deadline for making an HMRC marriage allowance claim for the past four years is 5th April 2022.
The lower earner is the person who has a disposable tax-free allowance; this is the partner who can transfer 10% of their total allowance so roughly £1260 to the higher earner, this figure is fixed and cannot be amended to a higher value or lower.
let me explain in a bit more detail how the HMRC Marriage allowance works:
Mr. Bloggs is a part-time employee of ABC PIZZA; a small local takeaway where he earns £8000 a year. He is earning well below his personal tax allowance threshold so can therefore transfer the full allowance of £1260 to his partner.
Mrs. Bloggs is a full-time employee of her local hospital and earns £29000 a year; she pays basic rate tax at 20% on her income above her personal allowance of £12570.
However, Mr. Bloggs has transferred his personal allowance of £1260 to Mrs. Bloggs; her personal tax allowance increases from £12570 to £13830. what this means is that Mrs. Bloggs now has an extra tax-free allowance of £1260 which she would normally have to pay tax on; saving her a total of £252 (20% of £1260).
Marriage tax allowance claims are usually processed within 6-8 weeks and payment is usually sent via cheque for claims of previous years where a refund is due.
the lower earner is the one who needs to make the application for the marriage tax allowance claim. the process is very straight forward and quite a simple one in fact, simply click the link for
mymarriageclaim.co.uk and complete the questions. it only takes minutes and you don't need tons of information.
all you require is your national insurance number for both the lower earner and the higher earner, complete the questions, sign the documents sit back, and relax, before you know it the cheque will be at your door.
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