Millions of married couples urged to do 30-second check to see if they are missing out on £252 a year --[Reported by Umva mag]

MILLIONS of married couples have been urged to do a 30-second check to see if they are missing out on £252 a year. Marriage allowance lets you transfer £1,260 of your personal allowance to your husband, wife or civil partner. We’ve explained exactly who’s eligible below Doing this reduces their tax by up to £252 in the tax year, which starts in April. Your personal tax-free allowance worth is £12,570. Once your earnings go over this level, you start paying tax at the basic rate of 20%. However, in a marriage, the partner who earns below the personal allowance can transfer up to 10% of it to their partner. This adds up to a maximum of £1,260 to the partner’s personal allowance, reducing how much tax they pay by £252. You can reclaim the tax back for up to four years – meaning the benefit could be worth up to £1,008 in total. The latest government figures show that 2.28million couples applied for the benefit in 2022/23 year. HMRC estimates that 4.2 million couples are eligible for the tax break, but only 2.1million claim it with a further 2.1million missing out. Steve Webb, partner at pension consultants LCP, told The Sun that the benefit is “well worth claiming”. He explained: “Claims can still be backdated to 2020/21 which could generate a useful lump sum.” Webb also said that with personal allowance being frozen until 2026, couples will want to make sure they “access all the tax-free income that they can”. “The marriage allowance is one way of doing this,” he added. How to apply for marriage allowance You can apply for marriage allowance online by visiting the gov.uk website, and it is free to do so. The person who earns the least should make the claim. However, if either of you gets other income, such as dividends or savings, you may need to work out who should claim. You can call the Income Tax helpline if you’re unsure. Changes to your personal allowances will be backdated to the start of the tax year, which is April 6, if your application is successful. To be eligible for the allowance the following must apply to your and your spouse: You’re married or in a civil partnership. You do not pay income tax or your income is below your personal allowance (usually £12,570) Your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance If you only pay income tax at the basic rate and believe you’ve been wrongly denied marriage tax allowance, you can appeal the decision directly to HMRC. You and your partner will get new tax codes that reflect the transferred allowance. Your tax code will end with ‘M’ if you are receiving the allowance and ‘N’ if you are transferring the allowance. You can read more about tax codes and how they work here. You’ll need to call the marriage allowance enquiries helpline to speak to an agent and explain the issue. You must cancel your claim for marriage allowance if you and your partner divorce or your income changes. You can do this online. Are you missing out on benefits? YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to Charity Turn2Us’ benefits calculator works out what you could get. Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit. MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data. You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs. Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.

Sep 19, 2024 - 18:24

Millions of married couples urged to do 30-second check to see if they are missing out on £252 a year --[Reported by Umva mag]

MILLIONS of married couples have been urged to do a 30-second check to see if they are missing out on £252 a year.

Marriage allowance lets you transfer £1,260 of your personal allowance to your husband, wife or civil partner.

a poster explaining how marriage tax allowance works — We’ve explained exactly who’s eligible below

Doing this reduces their tax by up to £252 in the tax year, which starts in April.

Your personal tax-free allowance worth is £12,570. Once your earnings go over this level, you start paying tax at the basic rate of 20%.

However, in a marriage, the partner who earns below the personal allowance can transfer up to 10% of it to their partner.

This adds up to a maximum of £1,260 to the partner’s personal allowance, reducing how much tax they pay by £252.

You can reclaim the tax back for up to four years – meaning the benefit could be worth up to £1,008 in total.

The latest government figures show that 2.28million couples applied for the benefit in 2022/23 year.

HMRC estimates that 4.2 million couples are eligible for the tax break, but only 2.1million claim it with a further 2.1million missing out.

Steve Webb, partner at pension consultants LCP, told The Sun that the benefit is “well worth claiming”.

He explained: “Claims can still be backdated to 2020/21 which could generate a useful lump sum.”

Webb also said that with personal allowance being frozen until 2026, couples will want to make sure they “access all the tax-free income that they can”.

“The marriage allowance is one way of doing this,” he added.

How to apply for marriage allowance

You can apply for marriage allowance online by visiting the gov.uk website, and it is free to do so.

The person who earns the least should make the claim.

However, if either of you gets other income, such as dividends or savings, you may need to work out who should claim.

You can call the Income Tax helpline if you’re unsure.

Changes to your personal allowances will be backdated to the start of the tax year, which is April 6, if your application is successful.

To be eligible for the allowance the following must apply to your and your spouse:

You’re married or in a civil partnership.
You do not pay income tax or your income is below your personal allowance (usually £12,570)
Your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance

If you only pay income tax at the basic rate and believe you’ve been wrongly denied marriage tax allowance, you can appeal the decision directly to HMRC.

You and your partner will get new tax codes that reflect the transferred allowance.

Your tax code will end with ‘M’ if you are receiving the allowance and ‘N’ if you are transferring the allowance.

You can read more about tax codes and how they work here.

You’ll need to call the marriage allowance enquiries helpline to speak to an agent and explain the issue.

You must cancel your claim for marriage allowance if you and your partner divorce or your income changes. You can do this online.

Are you missing out on benefits?

YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to

Charity Turn2Us’ benefits calculator works out what you could get.

Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.

MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.

You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.

Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.

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