Marriage Allowance Refund deadline 5 April 2020

The Marriage Allowance was introduced by HMRC in 2015, but hundreds of thousands of eligible couples are still not making the claim.

What is the Marriage Allowance and when can it be claimed?

The Marriage Allowance can be claimed where:

  • One partner earns under the Personal Allowance, which is currently £12,500.
  • The other partner should pay tax at the basic rate, in the current 2019/20 tax year this means earning less than £50,000.

The Marriage Allowance allows the individual with the lower income to transfer 10% of their personal allowance (£12,500 in 2019/20 so the amount transferred is £1,250) to their spouse or civil partner. The recipient’s tax bill is then reduced by 20% of this allowance, which can result in up to a £250 tax saving for the couple.

How far back can a claim for Marriage Allowance go?

The good news is that if you are eligible, you can claim all the way back to the 2015/16 tax year, meaning a potential tax saving of over £1,000:

  • 2018/19 tax year: personal allowance £11,850, so £1,190 can be transferred (maximum £238 tax saving).
  • 2017/18 tax year: personal allowance £11,500, so £1,150 can be transferred (maximum £230 tax saving).
  • 2016/17 tax year: personal allowance £11,000, so £1,100 can be transferred (maximum £220 tax saving).
  • 2015/16 tax year: personal allowance £10,600, so £1,060 can be transferred (maximum £212 tax saving).

Remember though, to get the full benefit, the person transferring the allowance must not be using it and the person receiving it should be able to use it. Also, claims in relation to the 2015/16 tax year need to be made by 5 April 2020.

How do you make an application for Marriage Allowance?

The partner with the lowest income should make the claim and can apply online here and if the application is successful it should be applied automatically (until you inform HMRC that your circumstances change).

The partner receiving the extra allowance will benefit through a change to their tax code or self-assessment tax bill, and backdated claims should be paid out by a cheque from HMRC.

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