Nearly half of eligible couples not claiming marriage tax allowance

26th September 2017

 

Following last year’s report from HMRC  showing that only a quarter of couples eligible for marriage tax allowance were actually claiming, figures have reduced but still stand at just over a half of couples missing out on the £230 a year they are entitled to.

Although the government have tried to simplify the application process, since the tax allowance was introduced back in 2015 only 2.2 million couples have claimed it versus the 4.4 million eligible.

HMRC have recently started to raise awareness through their advertising campaigns to persuade couples to apply, however although applications are increasing year on year claims have been much lower than expected by HMRC.

How does the marriage allowance work?

Many of those eligible may not be aware they are entitled to the marriage tax allowance or may not understand the application process so here are a few helpful pointers for couples looking to claim the allowance –

  • Partners must either be married or in a civil partnership to be eligible
  • One partner needs to be earning at least £11,500 a year, and paying tax at the basic rate of 20%. If he or she is earning over £45,000 they are not eligible (£43,000 in Scotland)
  • The other partner must be earning less than £11,500 in 2017-18 and thus paying no tax
  • If the above conditions are met, the partner not paying tax can transfer 10% of his or her tax allowance to a partner, so saving £230 in this tax year
  • Couples can make back-claims for previous years

If you still have queries regarding the marriage allowance, speak to your usual Whiting & Partners representative or get in touch with your local office to talk through your individual circumstances.



 
Other items in Blogs
 
Jonathan Moore
28th September 2018 Top 5 tips for start-up businesses

Businesses are born in many ways but there are some common considerations for all start-ups. Legal form Consideration needs to be given as to the how you wish to set up and structure your business. If you are going it alone perhaps a sole trader could be the best route or, if there is more…

Read More »

Mark Deighton
14th September 2018 Sage 50 VAT T Codes

Sage 50 VAT T Codes. Sage 50 Accounts book keeping software populates its VAT return by using tax (T) codes to indicate which VAT rate to apply to each transaction. Whenever you post a transaction in Sage 50 Accounts you must enter the relevant T code:   T0 – Zero rated transactions (eg most food, books, new builds,…

Read More »

Richard Alecock
13th September 2018 Making Tax Digital …… Only 200 days to go!

It’s time to decide how you will digitalise your records in order to meet HMRC requirements ahead of April 2019 HMRC wants the UK to be one of the most digitally advanced tax administrations in the world, improving efficiency, effectiveness and ease of compliance. Their plans signal the end of paper accounting for millions across…

Read More »

Jeannette Hume
4th September 2018 EIS Test Case: Capital gains tax exit exemption not linked to income tax entry claim.

In a recent HMRC test case (Ames v CRC), the Upper Tribunal considered whether it was necessary for EIS income tax relief to have been claimed when an EIS investment was made, for the transaction to then potentially qualify for exemption from capital gains tax when the investment was sold. For the case in question,…

Read More »

Ian Piper
4th September 2018 Preserving your business income

It’s the holiday season, many will have recently been or soon be travelling abroad. As well as marvelling at the sights, we will also be struck by how these countries are run, and compare them to life back in home.   It is easy to be jealous of: State pension levels in Sweden Police numbers on…

Read More »

Amanda Newman
3rd September 2018 Making Tax digital is nearly here

As we head towards the end of summer and we start to prepare the children to go back to school, life starts to get back to normal. If you run your own business you may want to use this time to start planning ahead for the changes in the way you file your paperwork with…

Read More »