Martin Lewis urges couples to cash in on little known tax benefit
Martin Lewis issues urgent warning to 2.1m couples who can cash in on lesser-known tax benefit before next week – and it could put £1,240 back in your pocket
- The expert answered questions on his new GMB series ‘Wallet Wednesday’
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Martin Lewis has issued an urgent warning to the 2.1m couples in the UK who can take advantage of a lesser-known tax benefit before next week.
The money saving expert, 50, hosted the first instalment of his ‘Wallet Wednesday’ series on Good Morning Britain today – where he’ll be advising viewers of small ways they can make their cash go further.
Writing into the segment, Sara asked the show’s new permanent host whether she could share her husband’s tax allowance.
In her letter, she explained how she pays tax through her employer – meaning she is classified as PAYE [Pay As You Earn].
Meanwhile, her husband works part-time and is self-employed, which means he has to declare his income for 2022-2023 to HRMC before the end of the UK’s financial year on April 5.
While he’s been filling out the paperwork, the viewer wanted to see if there were any tax breaks they could take advantage of.
She asked: ‘Can my husband share his tax allowance with me?’
In response, Martin said: ‘Possibly – and this is very important for anyone who is married or in a civil partnership.
‘And this is urgent as well because we have the end of the tax year, which is the 5th April. So it’s next week.’
Outlining how they could get some money back, Martin told Sara and her husband to look into the UK’s Marriage Allowance – which could put £1,242 back in their bank account if they’re not been taking advantage of it for the past five years.
In order to benefit from this, the Gov.uk website states that the lower earner ‘must normally have an income below your Personal Allowance – this is usually £12,570’.
In the 2022-23 tax year, UK residents earning more than £12,750 are required to pay income tax.
Martin explained: ‘Here’s the situation. One of you has to be a non-taxpayer […] married to a basic 20 per cent rate taxpayer.’
Martin Lewis (pictured) advised viewers to look into the Marriage Allowance while answering questions on his new GMB series ‘Wallet Wednesday’
Following the first ‘Wallet Wednesday’ segment, viewers expressed their gratitude for Martin’s tips on Twitter
Who can apply for the Marriage Allowance?
Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner.
This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).
You can benefit from Marriage Allowance if all the following apply:
– you’re married or in a civil partnership
– you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)
– your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance
If you find yourself in this situation, the non-taxpayer can give 10 per cent of their tax-free allowance back to their taxpayer partner.
Martin said: ‘You just go onto the Gov.uk website and apply for this to happen.
‘So the taxpayer now has £1,260 quid that they would have paid tax on at 20 per cent that is now tax-free – which equates to £250 for this year.’
However, the expert says couples need to investigate this urgently if they want to claim this benefit.
He continued: ‘You can go back four tax years. So if you apply today, you can go back to the 2018/2019 tax year.
‘If you leave it until the 6th April next week, you lose that year, which means you lose that £250.
‘Someone who is eligible [from 2018 up to now] would get £1,242 and it would either come by cheque or bank transfer. It’s the easiest money that you’ll make!’
Martin then went on to highlight how 2.1m couples in the UK have yet to cash in on the little-known benefit.
He said: ‘It is a gain in almost all circumstances.’
However, he did point out that there are some exceptions where couples are not allowed to cash in on the Marriage Allowance.
Describing the ‘quirk’, Martin added: ‘If the non-taxpayer is only just below the threshold and the taxpayer is only just above the threshold, it can be negative.
‘But in most cases, that doesn’t work.’
Following the first ‘Wallet Wednesday’ segment, viewers expressed their gratitude for Martin’s tips on Twitter.
One wrote: ‘How does Martin Lewis actually remember all that information? Like, is there anything he doesn’t know?’
Another added: ‘Martin Lewis is a legend, proper great man!’
‘A massive well done to Martin Lewis,’ a third said. ‘You cracked it on your first full morning!’
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