He said ‘There are 2.1 million eligible couples who are not claiming this, who should be claiming this and could gain’
Martin Lewis gave married couples a key tax tip (Image: ITV)
Martin Lewis has urged all married couples to take action to secure a substantial tax benefit. The money-saving expert highlighted how couples can claim valuable financial support when one partner is not in employment.
Mr Lewis previously explained the scheme effectively provides a £1,260 tax reduction for married couples, noting it applies ‘provided one of you is aged under 90’ – specifically those born after April 5, 1936.
Approximately 2.1 million eligible people are failing to claim this money, and those who haven’t previously applied could receive £1,260 as a single payment by backdating their claim for the previous four years plus the current year.
The arrangement allows one partner who is not a taxpayer to transfer the unused portion of their personal allowance to their spouse. Mr Lewis clarified: “Imagine we have a couple here. The crucial part of this. One of you needs to be a non-taxpayer, so you are not earning your full personal allowance you can earn before you start paying tax on it.”
Anyone not liable for income tax qualifies as a non-taxpayer for this relief. The receiving partner must not pay more than the basic 20 per cent tax rate.
He explained: “Clearly you have to be married or civil partners. Then what happens is this, each of you have your £12,570 personal allowance. That’s the amount you can earn that you don’t pay tax on each year.
“So the non-taxpayer can apply to Gov.uk to move 10% of their tax-free allowance across to the basic rate taxpayer.”
He explained that this means the non-taxpayer now has an allowance of £11,310, whilst the taxpayer has a combined allowance of £13,830.
“Now that 10% extra tax-free allowance they have, remember they would have paid tax on it at 20%, so the gain there is £252 a year, and that’s what moving across works, and in virtually every circumstance, even if the person here earned a little bit above that threshold where they might pay a little bit of tax, but as long as the person on this side is earning over £13,830, you’re always going to be net up if there’s a non-taxpayer and a taxpayer.”
Mr Lewis warned of a rapidly approaching deadline, as it applies to a specific tax year – with this one ending on April 5. Those who haven’t been claiming the break could receive a substantial lump sum, he said: “The tax year ends on the 5th of April, you can claim back up to 4 tax years as long as you are eligible, which means A total gain of £1,258.
“The way it works for the current year your tax code is changed, for past years they send you a check or they send you a bank transfer. So the marriage tax allowance is absolutely crucial to do.”
Mr Lewis urged people to put the date of March 1 in their diary. Martin explained: “So this is what you need to do. Either put in your diary now to do this on the 1st of March. There are 2.1 million eligible couples who are not claiming this, who should be claiming this and could gain. So do it on the 1st of March, or if you’re the type of person, and some people are who go, if I don’t do it now I’ll never do it, then you can go onto gov.uk you can download a form online and then you can post that in.”
He continued: “And as long as it all happens before the 5th of April, you will get this year’s and you will be able to backclaim the prior 4 years. But frustratingly, I found out this afternoon they’ve just taken it down. Terrible timing, but hey, these things happen.”
You can apply for marriage tax allowance here.
For the latest money saving tips, shopping and consumer news, go to the new Everything Money website.
