The 2019 to 2020 tax year is to end this week, with the tax year end falling on Sunday, April 5. And, while many people’s focus will understandably be on the ongoing coronavirus pandemic, others may be looking to ensure their finances are in order ahead of the 2020 to 2021 tax year beginning next Monday.
Ahead of the tax year end, millions of couples have been urged to claim a tax break which could be worth up to £1,150.
This can be achieved by claiming the Marriage Allowance.
Under this scheme, people who are marreid or in a civil partnership can transfer £1,250 of their Personal Allowance to their higher-earning partner.
In the current tax year, this can reduce the tax that their other half pays by up to £250.
In order to benefit as a couple, the lower earner must normally have an income which is below their Personal Allowance – which is usually £12,500.
It’s possible to calculate how much tax a person can save as a couple online, such as by using the government’s Marriage Allowance calculator.
It’s possible to apply for Marriage Allowance online.
Changes to the Personal Allowances will be backdated to the start of the tax year (April 6) if the application is successful.
Earlier this month, Martin Lewis, the founder of Money Saving Expert, warned that more than two million couples may be eligible for the Marriage Allowance.
“You can backclaim that four years,” he said of the Marriage Allowance.
“Which means if you were eligible for the past four years, as two million people who haven’t claimed are, you’re entitled to £1,150. People are getting these in cheques – this is big money.”
Mr Lewis went on to point out that some eligible people will miss out on a significant portion of this money, should they not claim the tax relief by the end of the tax year.
“However, don’t do this by the 5th of April, you lose the 2015/16 year which is the first year,” he warned.
“You’d still get the same amount but you would have got that anyway.”
So, who can claim the Marriage Allowance?
Marriage Allowance: Who can apply?
A person is able to benefit from Marriage Allowance if all the following conditions apply:
- They’re married or in a civil partnership
- They do not pay Income Tax of their income is below their Personal Allowance (usually £12,500)
- Their partner pays Income Tax at the basic rate – usually meaning their income is between £12,501 and £50,000 before they receive Marriage Allowance.
It’s not possible to claim Marriage Allowance if a couple is living together but they’re not married or in a civil partnership.