Martin Lewis explains how to increase income tax | European Markets

Cash knowledgeable Martin Lewis has revealed how to increase your Private Allowance to £13,830 per yr – however it’s important to be married for it to work.

Returning on the latest ‘marriage and divorce’ particular of The Martin Lewis Cash Present Dwell on ITV1 and ITVX, the Cash Saving Skilled founder set out how {couples} who’ve legally tied the knot can benefit from a tax perk.

Martin stated there are more than 2.1M married people who can get up to £1,258 back and may file a declare for the money with HMRC – however need to say by April 5.

Whether or not you’re married or in a civil partnership, together with same-sex civil partnerships, you possibly can apply to HMRC to maneuver round your Private Allowance thresholds, which will be price as a lot as £1,258 in complete, or £252 a yr throughout 5 years that you may declare.

Everybody normally has a Private Tax Allowance of £12,570 per yr, which is the utmost quantity you possibly can earn earlier than paying Earnings Tax. Each £1 you earn over that can see 20% taken away in tax.

However Martin defined how if one particular person in a married couple is a non-taxpayer – for instance they could not work, could solely volunteer, or be on unpaid maternity depart – then they may switch some of their tax allowance to their companion.

Martin defined: “Each of you have your £12,570 Personal Allowance, that’s the amount you can earn each year that you don’t pay tax on.

“So the non-taxpayer can apply to gov.uk to move 10% of their tax-free allowance across to the basic rate taxpayer.

“The net result of that is the non-taxpayer now has a Personal Allowance of £11,310 and the taxpayer has a combined allowance of £13,830.

“That 10% extra, they would have paid tax on it at 20%, so the gain there is £252 a year.”

Martin warned that the deadline to use is quickly approaching, because the tax yr ends on April 5.

He added: “You need to do this quickly because the tax year ends on April 5.

“You can claim back up to four tax years if you’re eligible, which means a total gain of £1,258.

“The way it works, for your current year your tax code is changed, for previous years they send you a cheque or bank transfer.

“So the Marriage Tax Allowance is absolutely crucial to do.”

After all, this perk is barely open to those that are married – single {couples}, even these cohabiting, can’t take benefit of the tax break.

Martin added that the web site the place you apply is at the moment down for upkeep, however is because of come back on March 1, so both wait till March to use or obtain and fill out the paper kind as an alternative.

He urged those that are eligible to get a declare in, including: “Either, put in your diary now to do this on March 1, there are more than 2.1M eligible couples who are not claiming this who should be claiming this who could gain… or go onto gov.uk and download a form and post it in.”