Marriage Tax Allowance

If you’re a married builder, did you know that you may be able to benefit from the Marriage Tax Allowance? Our guide aims to explain what the marriage tax allowance is, how it works and how it could benefit your tax rebate.

If you’re earning under £43,000 and your other half is earning under £11,000 you could be up to £220 a year better off!

Firstly, we’ll run through if you qualify. Then, we’ll show you how to apply directly with HMRC and what you’ll need at the ready to make sure you’re not caught off guard by any questions.

What is marriage tax allowance?
Simply put, Marriage Tax Allowance is a way for couples to transfer some of their personal tax allowance between each other to help improve your overall household income.

Who is entitled to marriage allowance?
In a nutshell, anyone who’s married or in a civil partnership can claim for Marriage Tax Allowance. So long as one of you is a “basic-rate” taxpayer and the other is a non-taxpayer.

How does the marriage tax allowance work?
The best way to explain how the marriage tax allowance works is in a story:

Dave works full time in construction and earns £38,000. His personal allowance is £11,000 – this is how much he can earn tax-free before he starts paying tax at 20%.

Dave’s wife, Shirley, works part time at the newsagents. She earns £4,500 per year and her personal allowance for the year is also £11,000. As such she’s a non-taxpayer. This means she has spare allowance available to transfer to her husband, Dave.

Shirley can transfer up to a maximum of 10% or £1,100 of her personal allowance to Dave.

When she does, Dave’s personal allowance increases to £12,100 which means he doesn’t pay 20% tax on the extra £1,100.

Under the Construction Industry Scheme, Dave’s annual tax rebate with Brian Alfred would be up to £220 better off due to Marriage Tax Allowance.

Sounds good, right?

How do I apply?
There are a couple of really simple ways to apply for the marriage tax allowance: Online with HMRC or you can call them on 0300 200 3300. It will only take a couple of minutes and you can be up to £220 a year better off.

What will I need to apply for the marriage tax allowance?
First things first – it’s the non-taxpayer (your other half) who must apply to transfer their allowance. If you do it the other way round, it won’t work. Here are a couple of other things you’ll also need to hand:

  • Both of your National Insurance numbers
  • Both of your dates of birth
  • Proof of identity (passports, drivers licence, bank account details, etc.)
  • And most importantly… the date of your marriage!

Benefits of applying for the marriage tax allowance
Anything we can find that will help you, your family or your rebate; we’ll always do our best to share with you. Marriage Tax Allowance is definitely worth applying for. With benefits like:

  • Increasing your household income
  • Better your end of year rebate with Brian Alfred
  • And, the fact you can backdate it to include last year too, it really is, a no-brainer.

How can Brian Alfred help?

For more information on how the marriage tax allowance could have a positive effect on your yearly tax rebate, don’t hesitate to get in touch with us or give us a call on 0800 464 0355. 

Nice one Brian!