Photo Caption: Tina Davies, Payroll Manager at Bevan & Buckland
January and February is always a time where most of us need to tighten our purse strings, and many families struggle with the bills that the festive season has left behind. With a recent study conducted by Money Saving Expert revealing that 3.1 million of the 4.2 million people eligible for Marriage Tax Allowance are still missing out, leading accountancy practice Bevan & Buckland is urging couples in marriages and civil partnerships to rethink their Income Tax reliefs.
“Taking advantage of Marriage Tax Allowance could be particularly helpful at this time of year, and with the break worth up to £432 you could have a happier New Year than you think. If one person in a marriage or civil relationship is earning under the Personal Tax Allowance threshold, part of the unused allowance can be transferred to the spouse. The person to receive the extra allowance must have an annual income of between £11,000 and £43,000,” said Tina Davies, Payroll Manager at Bevan & Buckland.
A maximum of £1,100 of the allowance can be transferred to your husband, wife or civil partner if they earn more than you, which would give a reduction on the receiver’s tax bill of up to £220 per year. You can also have your Marriage Tax Allowance backdated, with relief for the 2015/16 tax year worth an additional £212, however this can take up to two months to be actioned.
Your partner will receive the extra allowance courtesy of a change in tax code. The giver will have their tax code reduced by the amount transferred and as a result the letter at the end (suffix) will be changed to N. The receiver will have their tax code increased and the suffix changed to M. If your partner is self employed, then their Personal Allowance will change when they submit their Self Assessment tax return.
“Applying for Marriage Tax Allowance is simple. It can be applied for online if you have a personal government gateway account, by contacting HM Revenue and Customs (HMRC) on 0300 200 3300, or if you carry out Self-Assessment, then you can change it when you send the assessment in. If your circumstances change, due to divorce or death, then the Marriage Allowance can be cancelled with HMRC either online or by telephoning them direct,” concluded Tina.