Marriage allowance tax break - are YOU missing out on £1200 a YEAR savings?
TWO MILLION married British couples are missing out on £600 each due to not using the marriage allowance, Government figures have revealed. Martin Lewis explains how you can apply.
Martin Lewis talks about marriage tax allowance
A whopping million British married couples are missing out on £600 each in marriage tax breaks, figures have revealed.
A Freedom of Information request was submitted to the Government requesting figures surrounding the tax break - a tax concession allowed by government. Former pensions minister Sir Steve Webb described it as a 'shockingly' low take-up of a Government scheme.
It's believed the total in unclaimed tax breaks currently stands at around £1.3 billion.
Martin Lewis explained the marriage tax allowance on Good Morning Britain earlier this year. He said: "There are 4.2m people eligible for the marriage tax allowance and only 1.8m of them have claimed. So the majority still haven't got it.
"This is how it works: you need to be married or in a civil partnership, not cohabiting.
One of you needs to be a non-tax payer. So if you do not pay income tax - I don't care whether you work part time, I don't care if you volunteer. If you don't pay income tax and you're married to someone who pays the basic 20 per cent tax then you as a a non tax payer can apply. It has to be you that applies. to move 10 per cent of your tax-free personal allowance - which this year is £1150 - to the tax-payer.
Marriage allowance: The tax breaks allows couples to save hundreds of pounds
Marriage allowance allows a person to transfer £1,150 of their Personal Allowance to their husband, wife or partner
"Which means they now have £1150 of earnings they would have paid tax on at 20 per cent that they're not paying tax on at 20 per cent any more.
"That's a £230 odd gain this year."
He explained that as it started in April 2015, and you can back-claim until then, you can back claim up to £632.
What is the marriage allowance?
Gov.uk describes the marriage allowance as a tax break that allows a person to transfer £1,150 of their Personal Allowance to their husband, wife or civil partner - if they earn more.
Marriage allowance: You can apply for it even if you're claiming a pension
This reduces their tax by up to £230 in the tax year (6 April to 5 April the next year.
To benefit as a couple, the lower earner must have an income of £11,500 or less.
You can calculate how much tax you’ll pay as a couple here.
Speaking about the results of the FOI request, Sir Steve Webb told MailOnline: "The take-up of the new allowance is shockingly low.
"Even in its third year of operation, around two million couples who could benefit from the marriage allowance are not doing so.
Marriage allowance: It's just one of the many benefits of being married
"When family finances are so tight, I would encourage every married couple to check whether they might be eligible, including for the last two years, as they could qualify for a useful lump sum as well as a reduction in their ongoing tax bill."
Who can apply for the marriage allowance?
- You can apply for the married couple's tax break if all the following apply:
- You’re married or in a civil partnership
- You don’t earn anything or your income is £11,500 or less
- Your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)
It won’t affect your application for Marriage Allowance if you or your partner:
- Are currently receiving a pension
- Live abroad - as long as you get a Personal Allowance.