Published On: Tue, Mar 26th, 2024
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Martin Lewis issues urgent 3-word HMRC warning that could leave you £1,000 better off | Personal Finance | Finance

Martin Lewis speaking on ITV

‘Do it today’: Martin Lewis urges Britons to check if can claim up to £1,000 from HMRC (Image: ITV)

is urging Britons to check if they can save hundreds of pounds on by claiming the Government’s Marriage Allowance – but people need to act fast. Using allowance, eligible people can reduce their tax bill by up to £252 a year.

If they’re eligible to backdate, people can land as much as £1,000- but there are only a matter of days left to benefit from the full award.

Taking to This Morning Show today, the Money Saving Expert founder said: “An enormous majority of people where there’s a non-taxpayer and a taxpayer, will be better off doing this. Do it today. Go to GOV.UK and do it today.”

According to Mr Lewis, there are two key criteria people must adhere to to determine whether this could be an allowance they can apply for.

HM Revenue And Customs

Using HMRC’s allowance, eligible people can reduce their tax bill by up to £252 a year. (Image: Getty)

Mr Lewis said: “You must be married or in a civil partnership – just living together, cohabiting even if you’ve been living together 20 years and have 22 children doesn’t count. This is deliberate social engineering via the tax system to encourage marriage.”

“Then, if you are married or civil partners, one of you must be a non-taxpayer. The other must pay tax at the 20 percent rate.”

He explained: “So basically, the non-taxpayer usually means earning less than £12,570 a year and the taxpayers earning somewhere between £12,570 and around £50,000.”

Mr Lewis said those who aren’t sure if they qualify can apply and they’ll just be rejected if they’re not eligible.

Moving on to the benefits, Mr Lewis said: “So if you’re a non-taxpayer married to someone who pays tax at 20 percent, what happens is the non-taxpayer can give 10 percent of their tax-free allowance.

He explained: “Most people can earn £12,570 a year, tax-free. 10 percent of that is £1,250. So imagine you’ve got £1,250. You give it to your partner who’s earning and paying 20 percent tax. They’ve now got £,250 they were paying tax on at 20. That’s now tax-free. So that is a £250 gain in the year.”

However, according to Mr Lewis, the “important” thing to note is that it must be the non-taxpayer who applies to shift their tax-free allowance.

Mr Lewis said: “Apply at Gov.UK Just look at Marriage Tax Allowance. Make sure you’re on the right site and the non-taxpayer does the application.”

The financial guru also pointed out that, with many forms of tax, people can backdate claims by as many as four years before the current tax year.

Mr Lewis said: “Now, the tax year ends on April 5, which means if you do it now, you can get your marriage tax allowance for the 2019-20 tax year, assuming you were eligible for it.

“But if you wait and do it in a couple of weeks after April 6, you’ll only be able to go back to 2020-21, which means you’re going to lose £250.”

He noted: “When you’re going through the application, if you were eligible for it, you just put in the dates that you have been eligible and as long as you were in the same situation back then, you should get it.

“Just to put this in perspective, what that will mean for most people who were eligible and are back claiming is not only will the earners’ 20 taxpayers tax code be reduced, so they earn more this year, or take home more this year, rather but you’ll also probably get a check or backs payment for around £1,000, and that comes pretty quickly in most cases.

“So this is a grand of cash in your account if you’re backdating, which is why it is so important and the vast majority of people will gain by doing this.”

He added that, while almost everybody eligible will be better off by claiming, it depends on how much the taxpayer is earning to really benefit.

Mr Lewis explained: “If the taxpayer earns over £14,000 a year, you’re better off.

“If the taxpayer earns somewhere between £12,570 and £14,000 and the non-taxpayer is only just beneath the threshold where they pay tax, then they might be giving 10 percent of their tax-free threshold to them.

“They’re not going to use it all and they’ll be charged and taxed on more, so it can be worse off in that case.

“But it’s a very, very narrow band of people who are near, who are low earners, both low earners, both near the threshold – one just below, one just above – where it may not work.”

However, he noted: “An enormous majority of people where there’s a non-taxpayer and a taxpayer will be better off doing this.”

This Morning airs on ITV and ITVX on weekdays from 10am to 12.30pm.

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