Martin Lewis has an urgent tax warning for couples who are married or in a civil partnership.
The memo from the MoneySavingExpert relates to the marriage tax allowance perk - and could be worth up to £1,220. Marriage tax allowance allows the higher earner in your relationship to lower their tax bill by transferring the personal allowance of the low earner.
Your personal allowance is how much you can earn tax-free each tax year and the amount you can transfer through marriage tax allowance is £1,260. One of you must be a 20% taxpayer, while the other must be a non-taxpayer to apply for marriage tax allowance.
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For the current 2021/22 tax year, the tax break you can get is worth £252 - but you may be able to claim back for the last four tax years as well. If you’re eligible for this year and all four previous tax years, the tax break is worth £1,220 in total.
But as the new tax year starts on April 6, this means time is running out to claim for the 2017/2018 tax year, reports The Mirror. Once the new tax year starts, you’ll only be able to claim as far back as the 2018/2019 tax year.
In a warning issued about marriage tax allowance, Martin said: "The gain for this a year is £252, but this is back-dateable if you were eligible, so you need to do it now or you will lose the £230 pounds from 2017/18. And once you do claim by the way, you needn't claim again, you'll get it automatically, but you need to tell them if you've stopped becoming eligible.”
How to claim marriage tax allowance
MoneySavingExpert estimates around 2.4 million couples are missing out on this tax benefit. You’ll need to be married or in a civil partnership to claim marriage tax allowance - it doesn’t apply to those who are cohabiting.
As mentioned above, one of you also needs to be a non-taxpayer while the other person needs to be paying the basic 20% rate of tax. This usually means one of you doesn’t pay tax or earns less than £12,570, while the other person would be making between £12,571 and £50,270.
If you live in Scotland, the 20% taxpayer will normally earn under £43,662. Other eligibility you must meet includes both of you having been born on or after April 6, 1935.
MoneySavingExpert estimates around 2.4 million couples are missing out on marriage tax allowance. You can apply for marriage tax allowance online via the HMRC website or by calling 0300 200 3300.
The amounts for each year are worth up to:
- 2021/22 – £252
- 2020/21 – £250
- 2019/20 – £250
- 2018/19 – £238
- 2017/18 – £230
Once you’ve put in the claim, it’ll count for all the tax years going forward - you only need to tell HMRC if you’re no longer eligible. The person who doesn’t pay tax will need to apply for the marriage tax allowance.
