HMRC, formally known as HM Revenue and Customs, helps millions of people with their taxes every year, but most will know the service for the collection of tax. However, what many could be unaware of is a potentially hefty tax break they could secure if they are married. Marriage Allowance is a service offered by HMRC which allows those who are married or in a civil partnership to get money back in their pockets.
The scheme is centred around Personal Allowance – the amount of income a person is not required to pay tax on – which, in its standard form, is at £12,500.
Under Marriage Allowance, people earning £12,500 or less can transfer up to £1,250 of their Personal Allowance to their husband, wife or civil partner.
However, it is important to note that this can only be done if a person’s partner has an income which is higher, and they are a basic rate taxpayer.
A reduction of £250 per year in tax could be useful to a wide range of couples, however, there is also the potential for Britons to clinch a higher tax break.
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If married couples do not wish to miss out on a 2016/17 tax break, they will need to make a claim before April 5, 2021.
The message was reinforced by Angela MacDonald, HMRC’s Second Permanent Secretary.
She said: “For some, a tax break will be a welcome source of extra cash during these difficult times.
“I urge couples to take advantage of this offer, which could put up to £250 back in their pockets each year.”
There will be no need to use intermediary companies to get the tax break, and instead people can approach HMRC directly.
Some of these companies often charge a fee, but by going directly to the Revenue, Britons can ensure they receive 100 percent of their eligible entitlement.
Marriage Allowance is 10 percent of an individuals’ tax-free Personal Allowance, which is outlined by HMRC.
To this end, it is important to note Personal Allowance is set to undergo a change in the new tax year.
For 2021/22, Personal Allowance will be increased to £12,570, after this was first outlined by the Chancellor in his most recent economic statement.
Marriage Allowance claims will be automatically renewed by HMRC every year, but couples must contact the Revenue if their circumstances change.