Tonight’s episode of the Martin Lewis Money Show highlighted the eight big benefits of marriage – and civil partnerships – and how to weather the financial storm of divorce
Martin Lewis has urged couples to “save the date” so they can claim a major cash boost worth £1,258 this year.
The Money Saving Expert (MSE) founder returned to ITV screens tonight for his Martin Lewis Money Show Valentine’s Day Special. Tonight’s episode highlighted the eight big benefits of marriage – and civil partnerships – and how to weather the financial storm of divorce. In his “big briefing,” Martin shared how couples could give themselves a cash boost through Marriage Tax Allowance.
This tax perk allows the lower earner in the relationship to transfer £1,260 of their personal allowance to their partner. The personal allowance is the amount of money you can make before having to pay tax on it. The personal allowance currently sits at £12,570 – so if you earn below this, you do not pay any tax, and if you earn above, then you pay tax on your income over this level. For example, if you earn £12,600 – then you will only pay tax on £30.
Martin explained: “It works provided one of you is aged under around 90. Specifically, one of you needs to have been born after April 5, 1935. The crucial part of this is that one of you is a non-taxpayer. It doesn’t matter if you are volunteering or if you don’t pay income tax; overall, you need to be a non-taxpayer and the other needs to be paying the basic rate of tax, which is 20%.”
Have you claimed back £1,000s through marriage tax allowance? Let us know: mirror.money.saving@mirror.co.uk
In England and Wales, being a basic rate taxpayer means you are earning between between £12,570 to £50,270 a year. Martin noted that the thresholds for tax are a little different in Scotland, but it works the same as you need to be a basic taxpayer there too – so earning between £12,570 to £43,662.
He added: “If eligible, the non-taxpayer can transfer 10% of the amount they can earn tax-free each year to the taxpayer, so they pay less tax. The net result of the non-taxpayer now has an allowance of £11,310, and the taxpayer has the combined allowance of £13,830.”
“Now that 10% extra tax-free allowance, they would have paid tax on it at 20%, so the gain there is £252 a year, and that’s what moving across works. Even if the person earning less earns a little bit above the new threshold where they might pay a little bit of tax, as long as the other is earning over £13,830, you’re always going to be net up if there’s a non-taxpayer and a taxpayer.”
Martin told viewers that couples can backdate their Marriage Tax Allowance claims – which can be done online at Gov.uk – by four years too, so by claiming, they could receive a cash boost worth over £1,258 straight up. Once you’ve successfully claimed and backdated, then you will get your payment either through a bank transfer or through a cheque in the post, with Martin adding: “So, the Marriage Tax Allowance is absolutely crucial.”
However, the MSE founder shared that there was an “issue” with this at the moment. He explained: “Now, you need to do this quickly as the tax year ends on April 5. This afternoon, I found out they’ve taken down the Gov.uk Marriage Tax Allowance application page for essential maintenance for the next two weeks.
“It’s terrible timing, but I didn’t want to stop telling you all, and they’ve got to fix it. So this is what you need to do, you put in your diary to do this on March 1. There are 2.1 million eligible couples who are not claiming this, who should be claiming this, and could gain so much”
If you a not able to save the date, Martin said you can also download a form online and post it. However, you will need to make sure it arrives before April 5 to get this year’s boost and the years previous, if you are eligible. He added: “Frustratingly, I found out this afternoon that they’ve just taken it down.”
You can use an online tool called the Marriage Allowance Calculator to see if you are eligible which HMRC has previously said takes “only 30 seconds”. You can apply online through the HMRC website or by calling 0300 200 3300. You’ll need your National Insurance number and ID to hand. Once you’ve put in the claim, it’ll count for tax years going forward as long as you still meet the eligibility criteria.
