Martin Lewis has confirmed that HMRC is increasing the tax-free Personal Allowance to £13,830 for households, offering a significant tax break for married couples. In a recent update, one couple shared that they received a backdated payment of more than £1,000.
How the Marriage Tax Allowance Works
On his ITV Money Show Live, Martin Lewis explained that married couples can benefit from a special allowance if one partner is a non-taxpayer. The scheme allows the transfer of 10% of the non-taxpayer's personal allowance to their partner, resulting in a tax saving of up to £1,260 per year. This applies as long as one partner is under 90 years old and the other is a basic rate taxpayer.
Lewis stated: "Each of you has your £12,570 personal allowance. The non-taxpayer can apply to Gov.uk to move 10% of their tax-free allowance across to the basic rate taxpayer." This gives the non-taxpayer an allowance of £11,310 and the partner a combined allowance of £13,830.
Real-Life Example: Steve and Hilary
The show highlighted a couple, Steve and Hilary, who successfully claimed the allowance. Steve said: "I had retired on medical grounds so I was not paying tax. Following the show, I went on the gov.uk website and was surprised how easy it was to complete the forms. We are benefiting from about £250 a year in tax allowance. I was able to claim about 4 years of back tax, which was about £1,000. We used that to have a nice holiday in Cornwall."
Who Can Claim?
- You must be married or in a civil partnership.
- One partner must be a non-taxpayer (earning less than £12,570).
- The other partner must be a basic rate taxpayer (earning between £12,571 and £50,270).
Backdated Payments
Around 2.1 million people are missing out on this benefit. Those who haven't claimed can receive a lump sum of up to £1,260, backdated for four years plus the current year. HMRC will adjust the tax code for the current year and send a cheque or bank transfer for past years.
Lewis emphasized: "The marriage tax allowance is absolutely crucial to do." Eligible couples can apply online at Gov.uk.
