Following last year’s report from HMRC showing that only a quarter of couples eligible for marriage tax allowance were actually claiming, figures have reduced but still stand at just over a half of couples missing out on the £230 a year they are entitled to.
Although the government have tried to simplify the application process, since the tax allowance was introduced back in 2015 only 2.2 million couples have claimed it versus the 4.4 million eligible.
HMRC have recently started to raise awareness through their advertising campaigns to persuade couples to apply, however although applications are increasing year on year claims have been much lower than expected by HMRC.
How does the marriage allowance work?
Many of those eligible may not be aware they are entitled to the marriage tax allowance or may not understand the application process so here are a few helpful pointers for couples looking to claim the allowance –
- Partners must either be married or in a civil partnership to be eligible
- One partner needs to be earning at least £11,500 a year, and paying tax at the basic rate of 20%. If he or she is earning over £45,000 they are not eligible (£43,000 in Scotland)
- The other partner must be earning less than £11,500 in 2017-18 and thus paying no tax
- If the above conditions are met, the partner not paying tax can transfer 10% of his or her tax allowance to a partner, so saving £230 in this tax year
- Couples can make back-claims for previous years
If you still have queries regarding the marriage allowance, speak to your usual Whiting & Partners representative or get in touch with your local office to talk through your individual circumstances.