Smarter accounting

Marriage Allowance update April 2016

17 April 2016, Advocates, Artists, Creative Industries, Sole Traders

Marriage Allowance – who can get it?

The Marriage Allowance is a tax break for couples where one partner doesn’t use all their tax free allowance.  For the 2016-17 tax year, which runs from 6th April 2016 to 5th April 2017 the tax free allowance is £11,000.  If you meet all the criteria below, you can transfer some of your tax free allowance to your partner.

  • you are married or in a civil partnership
  • you don’t earn anything or your income is under £11,000
  • your partner’s income is between £11,001 and £43,000

How to claim the Marriage Allowance

If the three points about describe you, you can apply for the Marriage Allowance on the website.  HMRC will need to verify you and your partner so you must have national insurance numbers to hand for both of you.  There are various other pieces of information that HMRC may ask for including:

  • the last 4 digits of the account that your child benefit, tax credits or pension is paid into
  • the last 4 digits of an account that pays you interest
  • details from your P60
  • details from any of your 3 most recent payslips

How does my employer know if I get the Marriage Allowance?

If you receive some of your partner’s tax free allowance, your PAYE tax code will have a special letter at the end:

What is it worth?

The Marriage Allowance is worth up to £220 in the 2016-17 tax year.  Up to 10% of your full £11,000 tax free allowance can be transferred to your partner.  This means that if you earn £9,900 or less, you can transfer the maximum £1,100.  As your partner will pay tax of 20% at the basic rate, the cash benefit is 20% of the allowance transferred, being a maximum of £220.

Related articles

Website by Haiwyre