***Updated 18th January 2020***
No one would throw away money, would they? No one would pass on getting free cash, surely! So why is it that 2 million of us are doing exactly that?!
Are you missing out?
The government set up an initiative in 2015 for married couples to get free cash. Yep. I bet you didn’t ever think you would hear that sentence; the government wants to give us free money. And there isn’t a catch. If you meet the criteria, you get it – up to £891.50 to be exact.
So what it is?
The marriage allowance allows couples to transfer a portion of their personal tax-free allowance (£12,500 2019/2020) to the other higher earner, thus meaning it saves you money by making their tax bill cheaper.
MAKE SURE THE PERSON WHO HAS THE LESSER INCOME IS THE PERSON WHO APPLIES THOUGH. OTHERWISE, YOUR APPLICATION WILL BE REFUSED.
Who can apply?
- Firstly, you must be married or in a civil partnership. Unfortunately just living together or in a long term relationship doesn’t count
- One of you needs to be a non-taxpayer so either unemployed or earning less than £12,500 per year for 2019/2020. For previous years this needs to be:
£11,850 for 2018/2019
£11,500 for 2017/2018
£11,000 for 2016/2017
£10,600 for 2015/2016
Because that’s another great thing about this, you can even backdate your allowance if you haven’t claimed before!
- And the other person needs to be the higher earner and 20% basic rate taxpayer earning less than £50,000 per year. For previous years (if you’re backdating your claim £43,000 from 2015-2019. Unfortunately, those earning higher than this threshold and paying higher-rate tax aren’t eligible for the marriage allowance
How much exactly can I get, and how will I get it?
The marriage tax allowance started in April 2015, and each year the partner with the lower income (who is not paying tax monthly) can offset the tax they would have paid if they were employed/self-employed and paying tax above the personal allowance threshold.
This means if you haven’t claimed before, you can do it now, and it will be backdated so you’ll get this year and previous years (as long as in past years you met the criteria as outlined above). There is also no need to apply every year. The tax will simply be offset automatically until you inform HMRC that your circumstances have changed.
You won’t physically be posted a cheque for the amount of tax you have offset for 2019/2020, but the higher earner will have the full amount of the year deducted from their tax bill, thus meaning you will have a cheaper tax bill and more money in the bank at the end of the tax year.
More good news, if you are also applying for previous years of marriage allowance, you WILL receive a cheque in the post for those backdated claims.
Sounds good, how do I apply?
The good news is you can complete the form online in approximately 4 minutes, or alternatively call them on 0300 200 3300.
Make sure you have the following to hand though:
- Both yours and your partner’s national insurance number
- Your passport, child benefit letter, child tax credit information, income support details – you’ll only need one of these as proof of identity
- Your bank details
It’s actually your responsibility to ensure you meet the criteria and are eligible, so you could input your details online (over the phone they can tell you immediately), and it may look as though you have been accepted, however, if you have earned over that threshold or aren’t married, HMRC will pick up on it and write to inform you that you aren’t eligible for the tax break.
So what are you waiting for?! Apply online now and get the cash that’s sitting there waiting for you…!