HMRC is puzzled about why so few married couples bother to claim marriage tax allowance. Less than a quarter of couples claim the allowance, which was introduced in April 2015 and could net them £220 in the 2016/17 tax year. If you’re eligible to back-date your claim to include last year, it’s even better. Your tax windfall could run to as much as £432. But only one million out of 4.2 million couples have claimed so far.
It’s all about transferring part of your tax-free allowance to your partner, something you can do as long as one of you earns £11,000 or less and the other pays basic rate income tax. And according to HMRC it takes ‘less than five minutes’ to apply online.
We think we know why married couples aren’t flocking to claim. If you have never heard of the initiative, you’re not the only one. Very few of us attempt to decode the tax system for ourselves, it’s so horribly complicated. If you’re employed the regular way, your tax and other deductions are taken care of at source. Why, as an ordinary employed couple, would you bother to go anywhere near HMRC, or even assume you’d need to?
Apply for your marriage tax allowance
To apply for the allowance you need to go to this page on the HMRC website, and have this information ready:
- Both of your National Insurance numbers
- Proof of identity: either the last 4 digits of your child benefit, tax credits or pension account, the last 4 digits of any account that pays you interest, information from your P60 or one of your three most recent payslips, or your passport number and expiry date
The details of Marriage Allowance
- You can transfer £1100 of your Personal Allowance to your spouse or civil partner
- This cuts their tax by up to £220 each tax year
- You can claim if you earn less than your partner and have a maximum income of £11,000
- If you were eligible in the 2015/16 tax year, you can backdate your claim to 6 April 2015 and cut the tax you pay by £432.
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If you’ve lost the bookkeeping plot, hate it or are terrible at keeping your finances in order, why not ask us to do it for you? Then you can relax in the knowledge everything’s up to date and done properly.