HMRC has recently said that there are over a million couples in civil partnerships and marriages missing out on their Marriage Allowance. This is simply because they have not filled in the application for this tax relief. It will not automatically be applied by the Tax Office, people must apply if they think they are eligible.
Why are so many people not claiming their Marriage Allowance?
The main reasons for people not claiming this tax relief are they simply don’t know it exist, or they have found the application process too complicated.
Who is eligible?
The Marriage Allowance is designed to help couples in which one person earns less than the Personal Allowance amount and the other person earns enough to pay basic rate income tax. The partner not paying any tax (earns less than the Personal Allowance) can assign 10% of their tax allowance to the other person.
The couple must be in either a civil partnership or married. It does not apply to co-habiting couples.
How much is the Marriage Allowance worth?
In 2018-19 tax year:
One partner: earns less than £11,850, the Personal Allowance amount, pays no income tax
Other partner: earns over £11,850, pays income tax at 20% basic rate
Marriage Allowance: saving of £238 for that tax year
Once you reach an annual income of £43,430 in Scotland or £46,350 in the rest of the UK, you are no longer eligible for the Marriage Allowance.
Extra good news
You can backdate your claim up April 5th 2015, to the amount of £662. Over three million couples have successfully claimed their Marriage Allowance since it started.
As reported by the BBC, Mel Stride (financial secretary to the Treasury) said: “This is a really important tax relief and reflects the social importance of marriages and civil partnerships. I’d urge those that haven’t yet managed to claim the money to do so right away.”
Despite advertising drives to encourage more people to claim their entitlement, HMRC are still failing to reach more than a million couples.
How do I claim my Marriage Allowance?
To claim your Marriage Allowance you need to complete HMRC’s new online form, which they say only takes 10 minutes to fill in. Before you start, you do need to find some of your personal information, which may in itself take longer than 10 minutes. You will need to input both partners’ National Insurance numbers and prove your identity, in one of several ways:
- P60 information
- Last four numbers of a bank/building society account that pays interest to you
- Last four digits of the account which receives your pension, child benefit or tax credit payments
- Passport number and expiry
- Information from three payslips
Your application will be confirmed by email, then it will be processed.