HMRC update as Britons could reduce tax bill by up to £1,188 – act now
Martin Lewis reveals how to claim marriage tax allowance
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HMRC is a familiar name amongst Britons who deal with their tax affairs, but the body does not just collect taxes. Instead, it could be providing a tax rebate to eligible Britons, simply for just being married. This is under a process known as Marriage Allowance which could offer couples a potentially hefty tax cut.
The service offered by HMRC allows those who are either married or in a civil partnership to get money back in their pockets.
It operates under the Personal Allowance tax scheme – the amount of income a person is not required to pay tax on.
This is usually adjusted each tax year, and currently stands at £12,570.
With Marriage Allowance, those who earn £12,570 or less can transfer up to £1,260 of their Personal Allowance to their wife, husband or civil partner.
This can only be done, however, in certain circumstances.
If a person’s partner has an income which is higher, and they are a basic rate taxpayer, then this action is possible.
As a result of taking action on Marriage Allowance then, there could be financial rewards for Britons.
This tax year, a reduction of £252 may be observed, which can be potentially beneficial for couples.
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However, there is also the chance for Britons to gain even more tax back from HMRC.
Individuals will be able to backdate their claim to include any tax year since April 5, 2017 that they were eligible for the sum – meaning backpayments of an estimated £1,188.
A partner’s tax bill will be reduced depending on the Personal Allowance rate for the years someone is backdating.
It is free to apply for Marriage Allowance through the Government’s official website.
This process should always be done via the Government to ensure Britons receive 100 percent of the tax back to which they are entitled.
Changes to Personal Allowances are backdated to the start of the tax year if an application is successful.
HMRC will give a partner the allowance which has been transferred to them in one of two different ways.
Either a person will have their tax code changed, which can take up to two months, or the allowance will be provided when the individual sends their Self Assessment tax return.
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Couples can then expect their tax code to change to reflect the Marriage Allowance.
The tax code will end with ‘M’ for the person who is receiving the allowance under the scheme.
And ’N’ will be reserved for those who are transferring the allowance to their spouse.
HMRC has said a tax code will also change if someone is employed or receives a pension.
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