The Marriage Allowance was introduced in April 2015 and could save you £220 this year in tax (and £212 last year) but the take up has been very low, as couples just don’t know about it.  Its free money, so worth checking if you are eligible.

To qualify all of the following must apply:

• You are married or in a civil partnership ( just living together doesn’t count)
• Your income is under £11,000 in total in this tax year (£10,600 for 15/16)
• Your partner’s income is between £11,000 and £43,000

If so, the Marriage Allowances lets you transfer £1,100 of your personal allowance to your husband, wife or civil partner, if they are the higher earner.  That means effectively they can earn £1,100 more before they start paying tax, which will save you as a couple £220 a year.

Simple!

If you were eligible in 15/16, you can backdate your claim to 6 April 2015 and you can claim online by clicking here.  It’s the non-tax payer who needs to apply.  The allowance stays in force until one of you cancels it.

Once claimed, your partner will either have their tax code changed (and therefore pay less tax each month on their salary), or claim the allowance on their tax return, if they are self-employed.

The allowance is most likely to be used by part time workers or the newly self-employed with high initial costs.  For the self-employed, it’s the profit figure that you need to be looking at to determine if you qualify, not your sales figure – so you should check each year if profits vary year on year.

For more information contact Rosie Forsyth of Wilkins & Co.