Making the most of your marriage

Working offshore can be a challenge when you’re married. You’re away from home for long stretches at a time and putting in hundreds of hours more than the average worker each year. If you’re managing to support a family life alongside all that, then our hats are off to you. Just make sure you’re not one of the millions missing out on money as well as a stress-free life.

Marriage Allowance: the basics

Marriage Allowance is a terrific way of protecting your hard-earned cash from HMRC. It’s worth over £400 to loads of UK couples, but so far the word just isn’t getting out widely or loudly enough. It’s not all that complicated to get to grips with, but only about 25% of people who qualify are taking advantage of it.

In fact HMRC figures show that of the 4.2m people eligible for the allowance, only 1.67m have claimed it since its launch in April 2015.

Let’s take a look at the scheme and see what’s going on here.

Practically every worker in the UK gets a Personal Allowance. That allowance represents the amount of money you can have flowing in before the taxman gets his claws into it.

Right now, the basic figure is sitting at £11,000. If you earn less than that, you won’t be paying a penny in Income Tax. If you earn more, the taxman will essentially ignore everything you make below the threshold.

The thing is, not everyone is getting the full benefit of their Personal Allowance. People earning below £11,000, for example, have got some unused allowance left over. That’s where Marriage Allowance comes in.

Remember that the personal allowance is going up to £11,500 from April for tax year 2017/18 and the marriage allowance to £1,150.

Sharing the load

If your spouse or civil partner isn’t using up their full Personal Allowance, the Marriage Allowance rules let them transfer a portion of it to you. To qualify:

  • You must be married or in a civil partnership.
  • Your partner must be earning under the threshold, currently £11,000.
  • You have to be earning over £11,000 but under £43,000.

The scheme lets your partner transfer £1,100 of their Personal Allowance to you. In real terms, that comes to a total of £220 more in your collective pocket. It doesn’t end there, though. You can actually claim your Marriage Allowance for the previous year if you missed out then. Backdating your claim like this knocks down your family tax bill by over £400.

Getting your Marriage Allowance

There are no major headaches involved in claiming Marriage Allowance. Like everything else to do with HMRC, there are forms to fill in, but it really only takes a few bits of information about you and your partner to get the ball rolling. Even so, there are around 3 million couples losing out each year, either because they don’t know the scheme exists, or don’t know how to take advantage of it. It’s not as if HMRC’s making any great secret about Marriage Allowance, but they don’t always do a great job of spreading the word or making things simple.

Marriage Allowance is a good option for couples, so it’s definitely worth looking into it. After all, there really is no good reason to let the taxman hang onto more of your money than he’s owed.

Couples have up to four years to claim backdated allowances which can significantly boost your first claim.  The marriage allowance will automatically renew every year until you stop it, or your circumstances change, due to death or divorce, for example.

Unfortunately Couples who are cohabiting but are not married or in a civil partnership miss out, regardless of how long they have been together.

RIFT Tax Refunds are the leading tax refund specialists in the UK and have claimed back £153m for 63,000 customers since 1999