Are you married or in a civil partnership? Have you heard about the marriage allowance? It’s a Government scheme where couples can transfer some of their tax allowance between them and reduce the tax due over the year. It’s all perfectly legal, but not many people claim as it’s not widely known about. The gov.uk guidance is available here along with their calculator so you can check if you’re eligible. But read on for our guide to find out more.
Who can claim?
You can apply for the marriage allowance if you meet the following criteria:
• You’re married or in a civil partnership (living together doesn’t count)
• One of you doesn’t pay income tax or your earnings are below the current threshold of £12,500 per year (2019/20 tax year allowances)
• The other one pays tax at the basic rate (which is earning over £12,500 and under £50,000)
You can still claim marriage allowance if one of you is currently receiving a pension or even if one of you lives abroad, but you must receive a personal tax allowance to qualify.
How Can I Claim?
Check the criteria on the gov.uk website and you can apply directly from there. The person on the lower earning level needs to complete the application. If your application is successful, your allowances are reset from the beginning of the tax year, so it you apply a little later in the year, you can always claim back any over payments.
You can also backdate your claim to any year from 5th April 2015, so it’s worth seeing if you’re eligible.
What if my circumstances change?
Your marriage allowance will continue for future tax years, unless you tell HMRC your circumstances have changed. It’s important to let HMRC know if your circumstances change – you might be earning more money, you may be getting divorced or other changes might take place. It’s important to keep HMRC updated with any changes, so you don’t have an underpayment at the end of the tax year.
So, what’s this got to do with The Wage Shop?
Our great advice is just part of your simple, flexible service. With The Wage Shop, we make sure you’re paid on time and take care of your Tax and National Insurance contributions, leaving you to focus on your day to day workload.