HMRC is urging married people around the country to take advantage of a tax break worth hundreds of pounds before it's too late.
Eligible couples can take advantage of the Marriage Tax Allowance before the end of the 2021/22 tax year.
This Valentine’s Day serves as a reminder that married couples, or those in civil partnerships, can share their personal tax allowances if one partner earns an income under their Personal Allowance threshold of £12,570, and the other is a starter, basic or intermediate rate taxpayer.
Couples can transfer 10% of their tax-free allowance to their partner, which is £1,260 for 2021/22, and means they could reduce the tax they pay by up to an impressive £252 a year.
The best part of the scheme is that the allowance can be backdated for up to four previous tax years.
But eligible couples need to act fast as the new tax year starts on April 6, 2022, meaning that claims for the 2017/18 tax year need to be submitted fairly quickly.
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “Couples could be sitting on tax relief worth up to £1,220 that could provide vital financial support at a time they need it most.”
Married couples may have experienced a change in their circumstances which could now mean they are eligible for Marriage Allowance.
These include:
- A recent marriage or civil partnership
- One partner has retired and the other remains working
- A change in employment due to Covid-19
- A reduction in working hours which means their earnings fall below their Personal Allowance
- Unpaid leave or a career break
- One partner is studying or in education and not earning above their Personal Allowance
HMRC also said that if a spouse or civil partner has died since April 5, 2017, the surviving partner can still claim by contacting the Income Tax helpline here .
Marriage Allowance claims are automatically renewed every year, however, couples should notify HMRC if their circumstances change.
How is Marriage Allowance calculated?
Marriage Allowance is 10% of an individual’s tax-free personal allowance. The maximum amount that can be transferred to their husband, wife or civil partner is dependent on the Personal Allowance for that tax year.
Tax Year and amount that can be claimed
- 2021/22 - £252
- 2020/21 - £250
- 2019/20 - £250
- 2018/19 - £238
- 2017/18 - £230
Marriage Allowance is free to apply for and taxpayers can claim directly through HMRC’s online portal here.
