{"id":103375,"date":"2025-02-03T08:00:00","date_gmt":"2025-02-03T08:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=103375"},"modified":"2025-02-03T00:02:37","modified_gmt":"2025-02-03T00:02:37","slug":"14064-ax-free-income-overlooked-hmrc-scheme","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/14064-ax-free-income-overlooked-hmrc-scheme\/","title":{"rendered":"Households Can Unlock \u00a314,064 in Tax-Free Income with This Overlooked HMRC Scheme"},"content":{"rendered":"\n<p>As the <strong>cost of living continues to rise<\/strong> and <strong>tax thresholds remain frozen until at least 2028<\/strong>, more households are facing <strong>higher tax bills than ever before<\/strong>. However, <strong>HMRC has a tax break<\/strong> that many eligible couples are <strong>missing out on<\/strong>\u2014the <strong>Marriage Allowance<\/strong>. This scheme allows couples to <strong>transfer part of their tax-free Personal Allowance<\/strong>, increasing their <strong>household\u2019s total tax-free income<\/strong> and reducing their <strong>overall tax burden<\/strong>.<\/p>\n\n\n\n<p>What makes the <strong>Marriage Allowance particularly valuable<\/strong> is the <strong>ability to backdate claims for up to four years<\/strong>, meaning eligible couples could receive an <strong>instant rebate of up to \u00a31,242<\/strong>. Despite these <strong>significant financial benefits<\/strong>, thousands of couples <strong>remain unaware of the scheme<\/strong>, leaving <strong>millions of pounds unclaimed<\/strong>. With <strong>tax burdens expected to rise<\/strong> in the coming years, now is the perfect time for couples to <strong>check their eligibility and apply<\/strong> before they miss out.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Does the Marriage Allowance Work?<\/strong><\/h2>\n\n\n\n<p>The <strong>Personal Allowance<\/strong> is the amount of income a person can earn <strong>before paying tax<\/strong>, currently set at <strong>\u00a312,570 per year<\/strong>. However, the <strong>Marriage Allowance<\/strong> allows a lower-earning partner to <strong>transfer \u00a31,260 of their Personal Allowance<\/strong> to their spouse or civil partner, effectively reducing the <strong>higher earner\u2019s taxable income<\/strong>.<\/p>\n\n\n\n<p>Explaining how the scheme works, the <strong>government states<\/strong>:<br><em>&#8220;Marriage Allowance lets you transfer \u00a31,260 of your Personal Allowance to your husband, wife, or civil partner. This reduces their tax by up to \u00a3252 in the tax year (6 April to 5 April the next year).&#8221;<\/em><\/p>\n\n\n\n<p>This means that couples who <strong>qualify for the scheme<\/strong> could save <strong>hundreds of pounds annually<\/strong> while also benefiting from a <strong>backdated lump sum payment<\/strong>.<\/p>\n\n\n\n<p>HMRC provided an <strong>example of how the tax break works<\/strong> in practice:<br>*&#8221;When you claim Marriage Allowance, you transfer \u00a31,260 of your Personal Allowance to your partner. Your Personal Allowance becomes \u00a311,310, and your partner gets a \u2018tax credit\u2019 on \u00a31,260 of their taxable income.<\/p>\n\n\n\n<p>This means you will now pay tax on \u00a3190, but your partner will only pay tax on \u00a36,170. As a couple, you benefit, as you are only paying <a href=\"https:\/\/en.econostrum.info\/uk\/frozen-income-tax-bands-push-millions-higher\/\" data-type=\"post\" data-id=\"101665\">Income Tax<\/a> on \u00a36,360 rather than \u00a37,430, which saves you \u00a3214 in tax.&#8221;*<\/p>\n\n\n\n<p>While savings vary depending on <strong>individual earnings<\/strong>, the <strong>maximum annual tax reduction is \u00a3252 per year<\/strong>, which can be <strong>claimed retroactively for up to four years<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Who Qualifies for This Tax Break?<\/strong><\/h2>\n\n\n\n<p>Not all couples are eligible for the <strong>Marriage Allowance<\/strong>, but those who meet the following <strong>criteria<\/strong> can <strong>claim the tax relief<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The couple must be <strong>married or in a civil partnership<\/strong> (unmarried couples are not eligible).<\/li>\n\n\n\n<li>One partner must <strong>earn less than \u00a312,570 per year<\/strong> or have <strong>no income at all<\/strong>.<\/li>\n\n\n\n<li>The other partner must be a <strong>basic rate taxpayer<\/strong>, earning between <strong>\u00a312,570 and \u00a350,270 per year<\/strong>.<\/li>\n\n\n\n<li>Neither partner can be a <strong>higher or additional rate taxpayer<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>For example, if one spouse <strong>stays at home<\/strong> while the other earns <strong>\u00a330,000 per year<\/strong>, the lower-earning spouse can <strong>transfer \u00a31,260 of their Personal Allowance<\/strong>, saving the working partner <strong>\u00a3252 in taxes annually<\/strong>. Over time, this can <strong>add up to thousands of pounds<\/strong> in savings.<\/p>\n\n\n\n<p>Even couples who have <strong>never applied before<\/strong> can <strong>still claim the allowance for previous tax years<\/strong>, meaning they could <strong>receive a lump sum rebate<\/strong> from HMRC.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Much Can You Claim?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Immediate Annual Savings<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible couples can <strong>reduce their tax bill by \u00a3252 per year<\/strong> starting from the <strong>current tax year<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Backdated Claims for the Last Four Years<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Couples can also claim for the <strong>previous four tax years<\/strong>, meaning they could receive a <strong>lump sum rebate<\/strong> worth:\n<ul class=\"wp-block-list\">\n<li><strong>\u00a3252 for 2023\/24<\/strong><\/li>\n\n\n\n<li><strong>\u00a3252 for 2022\/23<\/strong><\/li>\n\n\n\n<li><strong>\u00a3250 for 2021\/22<\/strong><\/li>\n\n\n\n<li><strong>\u00a3238 for 2020\/21<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p>This brings the total possible rebate to <strong>\u00a31,242<\/strong>, which will be paid directly to the couple in a <strong>tax refund from HMRC<\/strong>.<\/p>\n\n\n\n<p>When combined with the standard <strong>\u00a312,570 Personal Allowance<\/strong>, the <strong><a href=\"https:\/\/www.express.co.uk\/finance\/personalfinance\/2006632\/tax-free-personal-allowance-increased-14064-backdating-households\" target=\"_blank\" rel=\"noopener\">total tax-free income<\/a><\/strong> for the household can rise to <strong>\u00a314,064<\/strong>\u2014a valuable financial boost for many families.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to Apply for the Marriage Allowance<\/strong><\/h2>\n\n\n\n<p>Claiming the <strong>Marriage Allowance<\/strong> is <strong>quick, free, and easy<\/strong>. Couples can apply:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Online through the HMRC website<\/strong> using their Government Gateway login.<\/li>\n\n\n\n<li><strong>By calling HMRC at 0300 200 3300<\/strong> to request assistance.<\/li>\n\n\n\n<li><strong>Via a paper application<\/strong>, available for those who prefer a <strong>postal submission<\/strong>.<\/li>\n<\/ol>\n\n\n\n<p>Once approved, the <strong>allowance automatically renews each year<\/strong>, meaning couples <strong>don\u2019t have to reapply<\/strong> unless their circumstances change.<\/p>\n\n\n\n<p>HMRC processes <strong>backdated claims within 8-12 weeks<\/strong>, and any rebates will be paid <strong>directly into the couple\u2019s bank account<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Couples Should Act Now<\/strong><\/h2>\n\n\n\n<p>With tax thresholds <strong>frozen until 2028<\/strong> and the cost of living continuing to rise, UK households need to <strong>maximize every available tax break<\/strong>. The <strong>Marriage Allowance<\/strong> provides a <strong>simple way<\/strong> for couples to <strong>reduce their tax bill<\/strong> while <strong>unlocking thousands of pounds in savings<\/strong>.<\/p>\n\n\n\n<p>For couples who haven\u2019t claimed before, the ability to <strong>backdate four years<\/strong> means they could receive an <strong>instant lump sum refund<\/strong>, easing financial strain and providing extra funds for <strong>household expenses<\/strong>.<\/p>\n\n\n\n<p>Since many taxpayers <strong>are unaware of this benefit<\/strong>, thousands of eligible couples have <strong>yet to claim what they are owed<\/strong>. Checking <strong>eligibility takes minutes<\/strong>, and for those who qualify, applying could mean a <strong>significant financial boost<\/strong> without extra effort.<\/p>\n\n\n\n<p>With <strong>millions in unclaimed tax relief<\/strong> still available, now is the perfect time for married couples to <strong>take advantage of this hidden tax-saving opportunity<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Millions of UK couples could legally increase their tax-free earnings to \u00a314,064 per year and claim up to \u00a31,242 in backdated tax relief, thanks to an HMRC-approved scheme. The Marriage Allowance allows eligible partners to transfer part of their Personal Allowance, reducing their tax bill while unlocking extra household income. But with many people unaware of this benefit, thousands of pounds remain unclaimed each year. Who qualifies, and how can you apply?<\/p>\n","protected":false},"author":4,"featured_media":102555,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[],"class_list":["post-103375","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxation","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/103375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=103375"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/103375\/revisions"}],"predecessor-version":[{"id":103376,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/103375\/revisions\/103376"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/102555"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=103375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=103375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=103375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}