Money Saving Expert Martin Lewis is encouraging married couples or those in a registered civil partnership to claim a tax break from HM Revenue and Customs (HMRC) potentially worth thousands of pounds.
The financial guru explained the financial benefits of claiming the Marriage Tax Allowance on a special edition of The Money Show Live after a viewer contacted him to say she and her partner had received a tax refund of nearly £1,000.
Martin explained: “If you are a married couple or in a civil partnership - not common law, just living together doesn’t count - and one of you is a non-taxpayer, the other is a basic 20% rate taxpayer, then this person can give 10% of their tax-free allowance to the other person.
“You apply online at GOV.Uk and it’s worth about £250 this year, but you can go back four years. The past years are done by cheque, this year is done by tax code change. It’s very lucrative, there are over one million people who aren’t claiming it.”
How does Marriage Tax Allowance work?
If one partner earns less than their personal allowance, which is £12,570 for the tax year 2021/22 and the other partner is a basic rate taxpayer (earning £12,571 to £43,662) then the lower earner can transfer 10% of their personal allowance to the higher earner and reduce the tax bill of the higher earner.
This transfer means the higher-earning partner now has a higher personal allowance and will pay less tax on their total earnings.
Marriage Tax Allowance claims can be backdated for up to four years, which means you could be due a refund from as far back as the 2017/18 financial year.
Visit GOV.UK to find out more about Marriage Allowance and make a claim.
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