Spouses encouraged to submit marriage allowance applications before the tax year concludes
Unionized Lovebirds: Scoop up £252 per Year Tax Savings Before Time Runs Out
Say goodbye to a slice of your hard-earned cash and hello to extra savings! Married couples and civil partners, brace yourself, as you've just got mere weeks left to claim a tax break that could potentially pocket you up to £252 a year.
Over 2.1 million couples are currently embracing this tax perk, allowing one half to pass on part of their tax-free personal allowance to the higher-earning one. HMRC predicts that a staggering 4.2 million couples are eligible to benefit, meaning there's a whopping 2 million pairs missing out on the opportunity!
March is the month of the year where marriage allowance applications surge, as couples race to claim before the fiscal year concludes on 5 April.
Many residents remain oblivious of their eligibility for this tax advantage, primarily couples where one spouse has retired, departed the workforce to assume caregiving duties, or engages in part-time or low-wage work.
In the UK, around two-thirds of individuals aged 60 and above are married or in a civil partnership. However, numerous elderly couples might overlook their chance to claim the marriage allowance if they've retired and their partner remains employed.
Angela MacDonald, HMRC's deputy chief executive, emphasizes, "We strive to ensure every eligible couple savors the bliss of marriage allowance tax relief. If couples have experienced a change in circumstances, such as one halting work or switching to a part-time, low-wage position, they might have overlooked their entitlement."
HMRC's marriage allowance calculator offers a swift 30-second determination of your eligibility.
What is Marriage Allowance?
The marriage allowance caters to couples in which one partner doesn't contribute to income tax (or their income remains below the £12,570 personal allowance) and the other partner pays basic-rate income tax.
To qualify, the higher earner's salary must fall within the boundary of £12,571 and £50,270 (£43,662 in Scotland). Both partners must be married or in a civil partnership. Cohabiting is not a valid condition.
The marriage allowance works by transferring up to £1,260 (10%) of the lower-earning partner's personal allowance to their spouse or civil partner, who generates more income. New tax codes are issued, reflecting this amendment.
The perk applies regardless if you receive a pension or reside overseas, as long as you receive a tax-free personal allowance. You can apply as long as both partners were born on or after 6 April 1935. If not, you might be eligible for the married couple’s allowance instead, valued between £401 and £1,037.50 annually.
What Can I Save?
This tax year's marriage allowance amounts to £252 annually. The actual savings vary based on both partners' income levels. Test your potential savings by checking the government's marriage allowance calculator.
Once a portion of the personal allowance is transferred, one partner might have to pay more tax, while the other pays less. Nonetheless, the pair will still counsel their tax bill overall.
If you're eligible and your application succeeds, you'll enjoy the tax relief automatically each year, meaning there's no need to reapply.
The government will also study your tax records to detect whether you're owed additional tax relief for the previous years, dating back to the 2019/20 tax year. The maximum annual reimbursements for each year are:
- 2024/25 - £252
- 2023/24 - £252
- 2022/23 - £252
- 2021/22 - £252
- 2020/21 - £250
If you receive the highest amount for the previous 4 years, you'll receive a lump-sum payment worth £1,006. Summed with the £252 annual savings for the current tax year, couples could potentially save a grand total of £1,258.
How To Apply?
Swiftly apply before the deadline approaches! The non-taxpayer is charged with the duty to apply, which can be actioned on the HMRC website. You'll receive an email verifying your application within 24 hours, and new tax codes within a few days if your application is successful.
If online application complications arise, you can apply via self-assessment (if you're already registered and send tax returns) or by writing to HMRC. You can contact 0300 200 3300 with any queries.
Always apply on the official gov.uk site to safeguard the full tax relief. Select third-party sites with caution, as some may charge you for applying, with fees reaching 48% of the tax relief's value.
Subscribe to our personal finance newsletter to stay updated on the marriage allowance and other tax-saving opportunities, especially for pensioners or those in part-time or low-wage work who might qualify and overlook this benefit. This tax perk, known as the marriage allowance, could potentially save couples up to £252 annually, with the amount increasing for previous years through reimbursements.
