Did you know that over one million couples pay too much tax.
Therefore as part of our tax reduction process, we routinely check to see if couples are eligible for the Marriage Allowance. This is where part of an individual’s personal allowance can be transferred to a spouse or a civil partner.
The allowance isn’t great but can be worth up to £238 in the current tax year. That’s enough for quite a few bottles of wine or a couple of meals at a decent restaurant. It might even be enough for flights to the sun. It’s easy to claim, so why wouldn’t you?
Imagine our surprise to see statistics from HMRC which estimate that 25% of eligible couples haven’t claimed. That’s over one million couples. To put it another way, the chancellor has £238,000,000 he wants to give back to taxpayers.
You can still make a backdated claim to the 2015/16 tax year, but only until 5 April 2019. A backdated claim could be worth around £900. If you don’t want the money there are loads of charities which would be grateful for the donation.
There are rules so not everyone can claim. One of the individuals must either not be working or earning less than the personal allowance and the other must not be a higher rate taxpayer. As we’ve said, HMRC think there are around one million couples fitting those criteria who have not applied.
If all of your income is taxed under PAYE or pension, it is probably easier for you to make a simple claim on line. You can do so on the HMRC website
If your circumstances are more complex we can help. You may have self-employment income, partnership profits, income from property, dividends from companies etc. All of these can make determining whether or not Marriage Allowance applies more complicated. It is quite possible for circumstances to change from one year to the next so eligibility needs to be monitored.
We provide a full accounts preparation and tax return service covering all aspects of personal and corporate tax (not just Marriage Allowance).