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Some people might be unaware, but if you are married or are in a civil partnership, you can claim up to £1,260 as a tax refund. So, if you are unsure how to apply and get benefits from it or how much time is required to get the advantage of the marriage tax allowance, we will guide you.
In this article, we will help your figure out all the information related to marriage tax allowance. We have also explained how you could claim the marriage tax allowance and how you can calculate the refund you can avail through it.
What is Marriage Tax Allowance?
Marriage Tax Allowance, introduced in 2015, allows you to claim up to 10% of your partner’s tax bill. You can get as much as £1,260 as a tax refund in your tax bill. Overall, there can be a reduction of £252 each tax year if you benefit from a marriage tax allowance. However, to benefit from this, you must have an income below the Personal Allowance. The Personal Allowance is restricted to £12,570 each tax year.
Who is eligible to get benefits from the Marriage Tax Allowance?
There are certain criteria that must be fulfilled to benefit from Marriage Tax Allowance. These are listed below.
- You should either be married or should be in a civil partnership. You cannot avail benefits from the Marriage Tax Allowance if you are just living together.
- Your income should either be less than your personal allowance, i.e., £12,570 in a tax year or one among you or your partner is not paying any Income Tax on their income.
- Your partner must have an income that can range from £12,571 up to £50,270. It implies that they should be paying the Income Tax at basic rates of 20% to benefit from the Marriage Tax Allowance. In Scotland, the income could range from £12,571 up to £42,662 to get the benefits. Anyone who pays Income Tax at higher or additional rates cannot avail of benefits from Marriage Tax Allowance.
- You and your partner’s birth date should be April 6, 1935, or earlier than it.
Overall, either of you should not be paying any Income Tax, and the other one should be paying their Income Tax at the basic rate of 20% to claim the Marriage Tax Allowance.
How to apply for Marriage Tax Allowance?
You can apply to claim the Marriage Tax Allowance for free. The one (either of the married couple or civil partners) who earns a lower income can claim for Marriage Tax Allowance. The Marriage Tax Allowance could be claimed through the GOV.UK website.
How much benefit can you get from Marriage Tax Allowance?
Through Marriage Tax Allowance, the higher earner among the couple benefits. He then needs to pay Income Tax on lesser income. Let’s look at an example to help us comprehend.
Suppose your income is non-taxable; that is, it is below the personal allowance. However, your partner’s income is £25,000. It means their taxable income is £12,430. After claiming the Marriage Tax Allowance, £1,260 of your personal allowance will be transferred to your partner. It means that your partner has a tax credit of £1,260. Overall, as a couple, you need to pay an income tax of £11,170 instead of £12,430.
However, this happens when one of them is not using tax benefits, so the partner who claimed the Marriage Tax Allowance can use it. We have listed down the tax benefit you can avail of for the recent tax years.
- For the tax year 2015-16- The maximum tax that could be saved during the tax year could be up to £212 since the personal allowance was £10,600.
- For the tax year 2016-17- The maximum tax that could be saved during the tax year could be up to £220 since the personal allowance was £11,000.
- For the tax year 2017-18- The maximum tax that could be saved during the tax year could be up to £230 since the personal allowance was £11,500.
- For the tax year 2018-19- The maximum tax that could be saved during the tax year could be up to £238 since the personal allowance was £11,850.
You could calculate and claim the tax savings for the backdated years using the above-mentioned thresholds.
For the tax years 2019-20 and 2020-21, you could claim up to £250 as tax savings via marriage tax allowance. For the year 2021-22, the tax savings are increased up to £252. So, you could now claim up to £252 as tax savings for the tax year 2021-22.
How much time does it take to get the money from Marriage Tax Allowance?
The time taken to get the money from Marriage Tax Allowance depends on the tax year in which you are claiming it. For the tax year 2021-22, the higher earner’s taxable income is lowered; that is, they have to pay less Income Tax. It is automatically reflected in his tax code. Also, the one who claimed marriage tax allowance will get a new tax code within two days.
In case you claimed for the Marriage Tax Allowance by sending the application to the Her Majesty’s Revenue and Customs online, it can take up to two weeks to be reflected in your account. If you have claimed Marriage Tax Allowance via post, it can take up to 24-28 working days to get the money.
You can apply for Marriage Tax Allowance when you and your partner have both fulfilled the criteria for availing of the Marriage Tax Allowance.
Through a marriage tax allowance, you can get up to £1,220 as a tax refund. You can end up saving £252 as tax saving each tax year. Hence, you must know what the procedure is of claiming a marriage tax allowance and how much benefit you could avail through it. We hope you find this article useful in clearing all your doubts and queries regarding getting a marriage tax allowance in the United Kingdom.