Martin Lewis has issued a warning to four million Brits ahead of the end of the tax year. The financial guru is advising around two million married couples and civil partners to check their eligibility for a tax break worth up to £1,260.
According to the Money Saving Expert, a lot of couples have never applied for the Marriage Tax Allowance despite being qualified. The benefit lets low-income earners transfer £1,260 of their Personal Allowance to their partner in order to reduce their annual tax bill. The lower earner of the couple must have an income below their Personal Allowance, which is typically £12,570, whilst the higher earner must pay basic rate tax in order to be eligible.
The non-taxpayers allowance falls to £11,310 when the transfer is made. Meanwhile, the taxpayer’s threshold increases to £13,830 which results in an annual saving of £252.
Martin Lewis said on his show: “The key requirement is that one partner must be a non taxpayer, and it is the lower earner who has to apply because they are the one transferring part of their allowance.”
He is urging couples to act before the end of the 2025/26 tax year on April 5 as claims can be backdated for up to four years. This means those who have qualified but not applied could be owed up to £1,260.
Mr Lewis added: “One of the main reasons so many households miss out is because they do not realise they can backdate, and that deadline is crucial if you want the full amount.”
The Department for Work and Pensions (DWP) said: “Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner. Your Personal Allowance is the amount you can earn before paying tax. This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).”
They added: “When you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple.”
According to the DWP, you can benefit from Marriage Allowance if all the following apply:
- you’re married or in a civil partnership
- you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)
- your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance
They added: “You can backdate your claim to 6 April 2021 (the 2021 to 2022 tax year) for any years you were eligible for Marriage Allowance. Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.”
