Martin Lewis has explained how the Marriage Allowance allows the high earner in your relationship to reduce their tax burden by carrying over the low earner’s Personal Allowance
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martin lewis has issued an urgent warning for married or civil union couples.
The memo from GeldSparExperten refers to the Tax allowance for marriages Perk – and could be worth up to £1,220.
The marriage allowance allows the higher earner in your relationship to reduce their tax allowance tax notice by transferring the personal allowance of the low-income earner.
Your personal allowance tells you how much you can earn tax free each tax year and the amount you can carry over through the marriage tax allowance is £1,260.
One of you must be a 20% taxpayer while the other does not have to be a taxpayer to claim a marriage tax credit.
For the current 2021/22 tax year, the tax credit you can get is £252 – but you may also be able to reclaim the last four tax years.
If you are eligible for this year and all four previous tax years, the total tax credit is £1,220.
But since the new tax year starts on April 6th, it means that the time to apply for the 2017/2018 tax year is over.
As soon as the new tax year begins, you can only claim until the 2018/2019 tax year.
Did you manage to reclaim £100 from the Marriage Tax Allowance? Let us know: email@example.com
In a warning about the marriage tax credit, Martin said: “The profit for this year is £252 but this is retrospective if you were eligible so you must do it now or you will lose the £230 from 2017/18.
“And by the way, if you’ve applied, you don’t have to apply again, you get it automatically, but you have to let them know when you’re no longer eligible.”
How to apply for the marriage allowance
MoneySavingExpert estimates that around 2.4 million couples are missing out on this tax benefit.
You must be married or in a civil partnership to be able to claim the marriage allowance – it does not apply to people who live in a civil partnership.
Also, as mentioned above, one of you does not have to be a taxpayer while the other person has to pay the property tax rate of 20%.
This usually means that one of you pays no tax or earns less than £12,570, while the other person would earn between £12,571 and £50,270.
If you live in Scotland the 20% taxpayer typically earns less than £43,662.
Other requirements you must meet include that you were both born on or after April 6, 1935.
MoneySavingExpert estimates that around 2.4 million couples are missing out on the marriage tax exemption.
You can apply for the marriage allowance online via HMRC website or by telephone on 0300 200 3300.
The amounts for each year are up to:
2021/22 – £252
2020/21 – £250
2019/20 – £250
2018/19 – £238
2017/18 – £230
Once you have made the application it will count for all future tax years – you only need to tell HMRC if you are no longer eligible.
The person who does not pay taxes must apply for the marriage tax credit.
https://www.mirror.co.uk/money/martin-lewis-issues-urgent-tax-26481528 Martin Lewis issues urgent tax warning for couples risking missing out on £1,220