A whopping million British married couples are missing out on £600 each in marriage tax breaks, figures have revealed.
A Freedom of Information request was submitted to the Government requesting figures surrounding the tax break – a tax concession allowed by government. Former pensions minister Sir Steve Webb described it as a ‘shockingly’ low take-up of a Government scheme.
It’s believed the total in unclaimed tax breaks currently stands at around £1.3 billion.
Martin Lewis explained the marriage tax allowance on Good Morning Britain earlier this year. He said: “There are 4.2m people eligible for the marriage tax allowance and only 1.8m of them have claimed. So the majority still haven’t got it.
“This is how it works: you need to be married or in a civil partnership, not cohabiting.
One of you needs to be a non-tax payer. So if you do not pay income tax – I don’t care whether you work part time, I don’t care if you volunteer. If you don’t pay income tax and you’re married to someone who pays the basic 20 per cent tax then you as a a non tax payer can apply. It has to be you that applies. to move 10 per cent of your tax-free personal allowance – which this year is £1150 – to the tax-payer.
“Which means they now have £1150 of earnings they would have paid tax on at 20 per cent that they’re not paying tax on at 20 per cent any more.
“That’s a £230 odd gain this year.”
He explained that as it started in April 2015, and you can back-claim until then, you can back claim up to £632.
What is the marriage allowance?
Gov.uk describes the marriage allowance as a tax break that allows a person to transfer £1,150 of their Personal Allowance to their husband, wife or civil partner – if they earn more.
This reduces their tax by up to £230 in the tax year (6 April to 5 April the next year.
To benefit as a couple, the lower earner must have an income of £11,500 or less.
You can calculate how much tax you’ll pay as a couple here.
Speaking about the results of the FOI request, Sir Steve Webb told MailOnline: “The take-up of the new allowance is shockingly low.
“Even in its third year of operation, around two million couples who could benefit from the marriage allowance are not doing so.
“When family finances are so tight, I would encourage every married couple to check whether they might be eligible, including for the last two years, as they could qualify for a useful lump sum as well as a reduction in their ongoing tax bill.”
Who can apply for the marriage allowance?
- You can apply for the married couple’s tax break if all the following apply:
- You’re married or in a civil partnership
- You don’t earn anything or your income is £11,500 or less
- Your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)
It won’t affect your application for Marriage Allowance if you or your partner:
- Are currently receiving a pension
- Live abroad – as long as you get a Personal Allowance.