The Marriage Allowance in the UK is a significant opportunity for married couples to save money, yet it remains underclaimed. This blog aims to shed light on this valuable allowance and guide couples on how to make the most of their tax benefits.
What is Marriage Allowance?
The Marriage Allowance is a UK tax benefit that allows lower earners to transfer a portion of their Personal Allowance to their higher earning spouse or civil partner. This can reduce the amount of tax the higher earner needs to pay, potentially saving couples up to £252 per year (as of the 2022/2023 tax year). To be eligible, one partner’s income must be below the Personal Allowance – typically £12,570 – and the other must be a basic rate taxpayer.
Why is it Underclaimed?
Despite its advantages, many eligible couples are not claiming the Marriage Allowance. This underutilisation could be due to a lack of awareness or understanding of the allowance. Additionally, some couples might incorrectly assume that the process is complicated or not worth the effort for the amount saved.
How to Apply
Applying for Marriage Allowance is relatively straightforward. Eligible couples can apply online through the UK government’s official website. The application requires basic personal information, and once approved, the changes are typically reflected in the higher earner’s tax code.
However some may feel this is an area out of their expertise and would prefer a claims company to claim especially when it is back dated tax.
Common Misconceptions
“It’s Not Worth the Hassle”: While the savings might seem modest, over time, they can add up. Plus, claims can be backdated to include any tax year since 5 April 2018 that you were eligible for Marriage Allowance.
“It’s a Complex Process”: The application process has been streamlined and can be completed online in a few simple steps.
“We Don’t Qualify”: Many couples who believe they don’t qualify may actually be eligible. It’s worth checking the criteria on the government’s website or consulting a tax professional.
Benefits Beyond Savings
Aside from the financial benefits, claiming your Marriage Allowance is also a way of ensuring you are taking full advantage of the tax system’s provisions. It can be a small but meaningful step in managing your household’s finances more effectively.
Conclusion
In conclusion, the Marriage Allowance is an underutilised benefit that could offer financial relief to many married couples in the UK. With straightforward application processes and potential for backdating claims, it represents an opportunity that shouldn’t be overlooked. For more detailed information and to apply, visit the UK government’s official Marriage Allowance page at https://www.gov.uk/marriage-allowance.
