Married couples have failed to take up Prime Minister David Cameron’s offer of a special tax allowance – so he’s preparing to up the ante.
The marriage tax allowance was introduced in April 2015, but just 330,000 couples have signed up to the scheme which allows them to save £4 a week income tax, or the princely sum of £212 a year.
Cameron announced the scheme explaining the tax break showed that the Tories valued family values by recognising marriage and civil partnerships.
The tax break works by allowing one partner to switch some of their personal income tax allowance to the other partner.
The government expected around 4 million couples to sign up.
Marriage allowance rebooted
The marriage tax allowance is only open to couples paying basic rate tax.
Now, Cameron and Chancellor George Osborne are boosting the scheme by offering the allowance backdated for four years, increasing the tax saving to £16 a week in the first year.
Financial Secretary to the Treasury David Gauke said: “Couples and civil partners should apply for this allowance as part of their financial planning for the year.
“It’s quick and easy to register online and the process is very straightforward.
“We will offer couples up to four years to claim backdated allowances, so as few as possible miss out on this valuable tax allowance.”
How to apply
To qualify for the allowance in the 2015-16 tax year, couples have to tick four boxes:
- They have to be married or in a civil partnership
- One should earn less than £10,600 a year, excluding any tax-free savings interest – effectively paying no income tax
- One should pay income tax at the basic rate
- Both should have been born after April 6, 1935
The lower earner then transfers part of their personal allowance – £1,060 – to the partner paying basic rate tax.
To apply for the allowance go to the HM Revenue and Customs web site
To complete the online application, you will need the National Insurance numbers for each partner, the last four digits of an account either receiving child benefit, tax credits or the state pension or an account paying interest and information from your last form P60.
