Only a few weeks left before 2 million couples get £250 tax breaks or they’ll miss out forever
TWO million couples will miss out on free money worth £250 unless they take action quickly.
A bonus for people on a lower income must be claimed before the end of the year on April 5.
The marriage tax allowance allows married couples and people in a civil partnership to share their personal tax allowances and it is estimated that more than 2 million people are missing out on this money.
To get this, one partner must earn less than the annual tax-free personal allowance, which currently stands at £12,570, meaning they pay no tax at all.
The other must be a basic rate taxpayer and earn more than that amount, up to a maximum of £50,270 per year.
The benefit can be granted retroactively for a maximum of four years.
This means that although you can now claim for the 2019/20 tax year, you will no longer be able to do so from April 6, when the new tax year begins.
Sarah Coles, personal finance expert at Hargreaves Lansdown, said: “If you qualify for the Wedding Tax Credit, you need to get your skates on and claim before April 5.
“You get a grant every year, but if you don’t use it on time, you lose that year’s grant forever.”
You can claim not only for that year, but also for the three others, in addition to the current year, as long as you qualify in each of the years.
How much it is worth depends on the year:
- 2023/24 – £252
- 2022/23 – £252
- 2021/22 – £252
- 2020/21 – £250
- 2019/20 – £250
If you register, you will also automatically receive this for subsequent years.
When does the tax year start and end?
Tax years run differently than the standard year of January through December
Instead, it runs mid-year from April to April.
Many other countries around the world have tax years that coincide with the calendar year.
For example, in Ireland, the US, France and Germany it starts on January 1 and ends on December 31.
But in Britain, for historical reasons, our tax year starts and ends halfway through.
The 2023-2024 tax year begins on April 6, 2023 and ends on April 5, 2024.
The 2024-2025 tax year runs from April 6, 2024 to April 5, 2025.
Can I get the tax benefit and how do I apply for it?
Sarah said: “To qualify you must be married or in a civil partnership, one of you must be a basic taxpayer and the other a non-taxpayer.
‘To qualify for the full grant, the non-taxpayer must earn no more than £11,310 – although as long as you earn less than the personal allowance you will get at least some benefit.
“It essentially allows the non-taxpayer to give a portion of their personal deduction to their spouse.
“Having a higher benefit means they will pay £252 less tax this year.
‘And because this can be done backdated for four tax years, as long as you were eligible in each of those years, you could be £1,256 better off in total.
“By signing up once, you can benefit every year until your circumstances change, so it’s the gift that keeps on giving.”
It is worth noting that both people in the couple must have been born on or after April 6, 1935.
Couples older than this age can receive the spousal allowance instead.
You can apply for marriage benefit online via gov.uk/apply-marriage-benefit.
If you were eligible in previous years and get it retroactively, you will receive a payment for the amount you owe.
For the current year and future years, your tax code is usually adjusted to reflect the change and you pay less tax.
What do the letters in my tax code mean?
THE letters in your code on your pay slip indicate how much tax you have to pay. Here’s our guide to what each of the letters means:
- c Your income or pension is taxed at Welsh rates
- L You are entitled to the standard tax-free personal allowance
- M Marriage benefit: you have received a transfer of 10% of your partner’s Personal Deduction
- N Marriage allowance: you have transferred 10% of your Personal Deduction to your partner
- S Your income or pension is taxed at the rates in Scotland
- T Your tax code contains other calculations to calculate your personal deduction. For example, this has been reduced because your estimated annual income is more than € 100,000.
- 0T Your Personal Allowance has been used up, or you have started a new job and your employer does not have the information needed to provide you with a tax code
- BR All your income from this job or pension will be taxed at the basic rate (usually used if you have more than one job or pension)
- D0 All your income from this job or pension will be taxed at the higher rate (usually used if you have more than one job or pension)
- D1 All your income from this job or pension will be taxed at the additional rate (usually used if you have more than one job or pension)
- NT You do not pay tax on this income
- Tax codes starting with K means that you have income that is not taxed in any other way and that is worth more than your tax-free allowance.
- W1/M1 If HMRC does not have enough information about you to send your employer the correct code, you will be given an emergency tax code which will not take into account any exemptions you may be entitled to. If this is the case, W1 or M1 will appear at the end of your code