Martin Lewis shares how married couples can claim an extra £1200ITV 1
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00:00So, let's look at exactly how this works.
00:02Imagine we have a couple here.
00:03The crucial part of this,
00:05one of you needs to be a non-taxpayer.
00:07So you are not earning your full personal allowance
00:09you can earn before you start paying tax on it.
00:12Now, people say, what about if I'm volunteering?
00:13What about if I'm part?
00:14If you don't pay income tax, you're a non-taxpayer.
00:17The other needs to be paying the highest rate of tax
00:20they pay is the basic 20% rate of tax.
00:24In Scotland, as long as you're paying tax,
00:26there are different thresholds there,
00:27but it works roughly the same way.
00:28And clearly you have to be married or civil partners.
00:30Then what happens is this,
00:32each of you have your £12,570 personal allowance.
00:36That's the amount you can earn
00:37that you don't pay tax on each year.
00:38Yep, you all know that?
00:40Okay.
00:41So the non-taxpayer can apply to gov.uk.
00:45I'm gonna give you a question about that later,
00:47there's an issue there.
00:48But apply to gov.uk to move 10% of their tax-free allowance
00:52across to the basic rate taxpayer.
00:54There we go.
00:56Perfect.
00:58The net result of that is the non-taxpayer
01:00now has an allowance of £11,310.
01:04And the taxpayer has a combined allowance of,
01:07it should merge if I'm lucky, there we go, £13,830.
01:11Now that 10% extra tax-free allowance they have,
01:15remember they would have paid tax on it at 20%.
01:18So the gain there is £252 a year.
01:23And that's what moving across works.
01:24And in virtually every circumstance,
01:27even if the person here,
01:29and a little bit above that threshold
01:30where they might pay a little bit of tax,
01:32but as long as the person on this side
01:34is earning over £13,830,
01:36you're always gonna be net up
01:38if there's a non-taxpayer and a taxpayer.
01:40Now, you need to do this quickly
01:42because this year it's each tax year
01:44and the tax year ends on the 5th of April.
01:46You can claim back up to four tax years
01:49as long as you were eligible,
01:51which means a total gain of £1,258 a year.
01:58The way it works,
01:59for the current year your tax code is changed,
02:01for past years they send you a cheque
02:02or they send you a bank transfer.
02:04So the marriage tax allowance is absolutely crucial to do.
02:07There's a but, but I can see you've got questions.