How couples can save hundreds through extra tax relief

Editorial Feature

If you are with your other half, you can can save hundreds of pounds using a marriage allowance.

HM Revenue and Customs (HMRC) have confirmed that married couples and those in civil partnerships could reduce their income tax by up to £252 a year by sharing their personal allowances.

Nearly 1.8 million married couples and those in civil partnerships are using the marriage allowance to save hundreds in income tax. However, many couples are still missing out on hundreds of pounds worth of tax relief, so act now.

Weddings - Photo by Jeremy Wong from Pexels

Newly weds and those in civil partnerships now eligible

With an increase in summer weddings due to the restrictions easing. Many newlywed couples or those in civil partnerships could now be eligible for this tax saving. Even if you have been married for years, a change in your circumstances could also mean you are newly eligible. So do check the list below for guidance.

What is a marriage allowance and how does it work?

Marriage allowance allows married couples or those in civil partnerships to share their personal tax allowances if one partner earns an income under their personal allowance threshold of £12,570 and the other is a basic rate taxpayer. You can transfer 10% of your tax-free allowance to your partner. This amounts to £1,260 in the 2021 to 2022 tax year.

Couples can reduce the tax they pay by up to £252 a year. Couples can also backdate their claims for any of the four previous tax years. Potentially a cost-saving of up to a total of £1,220.

How can I apply?

It is free to apply for a marriage allowance. The easiest way for taxpayers to check their eligibility and make a claim is via GOV.UK.

Marriage Allowance lets eligible couples share their personal allowances and reduce their tax by up to £252 a year. Nearly 1.8 million couples are already using the service – it is free, quick and easy to apply, just search ‘marriage allowance’ on GOV.UK.

Angela MacDonald, HMRC’s deputy chief executive and second permanent secretary
Photo by Mikhail Nilov from Pexels

Married couples may also be eligible – so check now

Married couples may have experienced a change in their financial circumstances this year. A change in your employment circumstances for example means you may now be eligible for Marriage Allowance. Take a look at the list below to see if you qualify?

  • A recent marriage or civil partnership
  • One partner has retired and the other remains working
  • A change in employment due to Covid-19
  • A reduction in working hours which means their earnings fall below their personal allowance
  • Unpaid leave or a career break, or
  • One partner is studying or in education and not earning above their personal allowance.

If a spouse or civil partner has died since 5 April 2017, the surviving person can still claim by contacting the income tax helpline.

Marriage allowance claims are automatically renewed every year. However, couples should notify HMRC if their circumstances change.

Responding to the government’s announcement on tax allowance for married couples Clare Moffat, head of the intermediary development and technical team at Royal London, said:

“It’s great news that 1.8m married couples and civil partners have taken advantage of this tax relief by sharing their personal allowances. However, many more couples may be eligible for marriage allowance, especially since this can be backdated for the four previous tax years.

“This tax relief can be particularly useful when one person retires but their spouse continues to work, or when someone retires and moves from being a higher rate taxpayer to a basic rate taxpayer and their spouse does not pay tax. If either you or your spouse or civil partner have had a change in circumstances, it’s well worth checking if you could be eligible to claim on GOV.UK to save more money to enjoy together.”

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