Married couples could be entitled to reclaim up to £1,000 from the Government, regardless of whether they have since divorced or been widowed. Yet they may have just until April 5 to submit their complete application.
Financial expert Laura Pomfret appeared on BBC Morning Live, encouraging couples to check their entitlement, emphasising it “really doesn’t take that long” and could result in hundreds of pounds being returned. The benefit comes via the relatively unknown Marriage Tax Allowance scheme.
She said: “It lets you transfer some of your personal tax allowance to your partner to reduce the amount of tax that they pay on their income. It can reduce your partner’s tax by up to £252 per year, and you can go back four years.”
Should you qualify for this maximum amount spanning all four years, it could mean £1,008 returned from taxes. Nevertheless, she cautioned: “You need to act quickly because to get that backdated payment to 2021-22, you need to do it before the end of the tax year.
“By the 5th of April, because the new tax year starts on the 6th. So, this is the job for this week or next week.”
Your eligibility for this rebate depends on both your and your partner’s earnings. Each person earning below £100,000 typically receives a personal allowance of £12,570, representing the amount they can earn annually before income tax applies. To qualify, one partner must earn above the personal allowance threshold annually but below £50,270, while the other must earn under £12,570. This includes all taxable income sources, like part-time work and pension earnings.
Laura explained: “The marriage allowance lets the person earning less transfer £1,260 of their allowance to their partner. So their spouse has an increased personal allowance of £13 830 instead of the £12,570, which means they’ll have a little less of their income taxed at the 20% base rate.”
This results in additional take-home pay rather than money going to HMRC, equating to approximately £252 annually. Simultaneously, the lower earner’s personal allowance reduces to £11,310.
Laura emphasised the importance of remembering this figure: “The person that transfers their allowance, if they then go on to earn more than £11,310, then they’ll be taxed at 20%.”
Additionally, applicants must be married or in a civil partnership to claim the marriage tax allowance. However, the finance expert highlighted that backdated payments may still be available if you met the criteria during the previous four tax years, but have since separated or been bereaved
Laura stated: “You may be separated or divorced now, and but if you were eligible during the past four years, you could still claim for those backdated payments. Make your claim in the same way as a couple that are still together and still married.”
Regardless of marital status, both parties must agree to claiming marriage allowance, with the lower earner required to complete and submit the form to HMRC, as it involves transferring their personal allowance.
Laura added: “For anyone who would have been eligible and but their partners passed away since April 5th, 2021. You can still claim and the way that you would do this and you would call the income tax helpline on 0300 200 3300, but it’s worth checking.”