Latest news with #MarriageAllowance
Daily Mirror
13-07-2025
- Business
- Daily Mirror
HMRC rules could see you boost tax-free limit by £16,000
There are a number of HMRC tax breaks HMRC offers several lesser-known tax breaks that could entitle households to up to £16,000 tax-free, effectively increasing their disposable income by reducing the amount of tax they owe. These tax reliefs come with their own set of criteria and claiming methods, but none demand a hefty salary or advice from financial experts. Most of the claiming process can be done online, with comprehensive details about these schemes accessible on Some underused tax breaks include Marriage Allowance worth £1,260, Trading Allowance worth £1,000, the Rent-a-Room Scheme worth £7,500, Tax-free Childcare, worth £2,000 per child, and the Tax-free Savings Allowance worth £5,000. Laura Suter, director of personal finance at AJ Bell, told Birmingham Live: "These five simple tax tips don't require you to have a six-figure salary or a team of advisers on speed dial. They're well within reach for the average household and are fully sanctioned by HMRC, so there's no need to feel like you're gaming the system. "You can backdate any claims for up to four years, assuming you were eligible in those years, which would get you a total of £1,260, including the current year's claim. If you earn more than £1,000 from your side hustle in a tax year, you'll still benefit from the tax break, but you'll need to fill out a tax return to declare the extra income and pay any relevant tax." Marriage Allowance Marriage Allowance, also extended to civil partners, allows people to transfer as much as £1,260 of their personal allowance to their spouse. This can lead to a reduction in the annual tax bill for the household by £252. To take advantage of the Marriage Allowance scheme, one partner must be a basic rate taxpayer and the other must earn less than the personal allowance, typically £12,570 annually. It's the lower-earning partner who needs to apply for the Marriage Allowance. For those with trading income, including self-employment or renting out personal equipment, there's a chance to pocket up to £1,000 each year without paying tax on it. Suter recommends: "Just make sure you keep track of any relevant paperwork proving your income." Rent-a-Room The Rent-a-Room Scheme is another tax-efficient option, allowing you to earn up to £7,500 a year tax-free by letting out a furnished room in your house. There are no restrictions on how much of your home you can let or for how long. However, you must be a resident landlord or operate a bed and breakfast or guest house to qualify. If your property is divided into separate flats, this scheme isn't for you. Suter points out: "Be aware that if you own the property jointly with someone and split the income, you only get half the relief per person." Tax-free Childcare Tax-free Childcare is available alongside free childcare for those who are eligible for both. The scheme provides an online account for each child, and for every £8 you deposit for your childcare provider, the government will contribute £2. It can offer up to £2,000 a year per child or up to £4,000 a year if your child is disabled. There are various eligibility criteria depending on your household circumstances, which can be found on Tax-free Savings Allowance In addition to a personal allowance, workers receive a tax-free savings allowance each year, based on their earnings. If you earn £17,570 or less, you could qualify for the starting rate, which allows you to earn up to £5,000 in interest before having to pay tax on it. This allowance gradually decreases as your income rises. Individuals earning £125,140 or more per year won't be eligible for any personal savings allowance. Suter offered an additional tip for this tax break: "This trick is particularly handy for couples where one has a low income, but as a household, they have a decent amount in savings. If you transfer the bulk of the savings to the lower-earning half of the couple, you can maximise the tax-free limit."
Scottish Sun
28-06-2025
- Business
- Scottish Sun
How to legally pay less tax on your income as millions hit with stealth taxes
MILLIONS of workers will be hit with higher tax bills in the coming years as frozen thresholds will force them to hand over more of their earnings to the taxman. Around 4.1million extra workers will be dragged into higher tax bands by 2027-28, according to the most recent figures from the Office for Budget Responsibility. 1 Millions of people will be dragged into paying more tax in the coming years Credit: Getty Income tax thresholds are frozen until April 2028, which means that more people could find themselves pushed into higher tax bands through a concept called fiscal drag. The higher rate tax band is frozen at £50,270, which means any earnings over this amount are taxed at 40%. Meanwhile, the additional tax band is currently fixed at £125,140, beyond which any earnings are taxed at 45%. But there are things you can do to prevent a surprise tax bill from landing on your doorstep. Here we explain how you can reduce your tax bill and avoid the tax trap. Apply for tax relief One way to reduce your tax bill is to claim tax relief. You can claim the relief on your job expenses, which means you will take home more of your income and pay less tax. To be eligible you must use your own money for things that you need to buy for your job and you only use for work. You can claim for items including working from home, uniforms, work clothes, tools, vehicles you use for work, travel and overnight costs. You cannot claim tax relief if your employer gives you all the money back or alternative equipment. You will get the relief based on what you have spent and the rate at which you pay tax. For example, if you claim £60 of tax relief and usually pay tax at 20% then you will get £12 back. The exact amount you could get depends on what you are claiming for. For more information and to make a claim visit How do I check my tax code? YOU can check your tax code on your personal tax account online, on any payslips or on the HMRC app. To log in, visit If you have one, you can also check it on a "Tax Code Notice" letter from HMRC. Bear in mind that you might need your Government Gateway ID and password to hand to log in. But if you don't have this you can use your National Insurance number or postcode and two of the following: A valid UK passport A UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland) A payslip from the last three months or a P60 from your employer for the last tax year Details of a tax credit claim if you have made one Details from a self assessment tax return (in the last two years) if you made one Information held on your credit record if you have one (such as loans, credit cards or mortgages) Claim marriage allowance If you are married or in a civil partnership then you may also be able to reduce your tax bill by claiming Marriage Allowance. Every worker has something called a Personal Allowance. This is the amount of money you can earn every financial year before you start to pay Income Tax. For the current tax year the Personal Allowance is £12,570. If you earn less than this then you usually do not have to pay Income Tax. Marriage Allowance is a special tax rule that lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner. It is free to apply for and can reduce your tax bill by up to £252 every tax year. To be eligible you need to be married or in a civil partnership. Your income must be below £12,570 and your partner must pay Income Tax at the basic rate, which usually means their income must be between £12,571 and £50,270. Ian Futcher, financial planner at Quilter, said: 'Many eligible couples haven't claimed this, often because they simply don't realise it exists. 'It can be backdated for up to four years if you're eligible.' The fastest way to apply for the allowance is online and you should get an email confirming your application within 24 hours. You can also claim Marriage Allowance by post using the MATCF form. For more information visit Make use of salary sacrifice Salary sacrifice is a great way to top up your income without paying any tax. It lets you exchange some of your wages for a different benefit from your employer, such as a company car, childcare vouchers or pension contributions. Your salary is then reduced by the cost of any benefits you choose. As your salary is lower, you will pay less tax and National Insurance. For example, someone who earns the UK average salary of £37,430 could decide to sacrifice £200 a month into their pension. Over the course of a year they would pay £2,400 into their pension. By using salary sacrifice their wage would fall to £35,030 a year, which would save them around £480 a year in Income Tax. They would also save nearly £200 in National Insurance, which means their total saving would be £672. Salary sacrifice also saves your employer money on National Insurance. Many employers will pass this saving on to you by paying more money into your pension. As a result, your total pension contribution could be more than £2,700. Sarah Coles, head of personal finance at Hargreaves Lansdown, said it is worth checking if your employer offers salary sacrifice. She said: 'It will not boost your take-home pay, but it will cut your tax bill and make your money go further.' Pay into pension If you are lucky enough to earn more than £60,000 a year then you may be able to get more Child Benefit with an under-used trick. Child Benefit is paid by the government to parents or other people who are responsible for bringing up a child. It is currently worth £26.05 for the eldest or only child and £17.25 for every additional child you have. You get this full payment if you earn less than £60,000 a year. But beyond this point you need to start paying the benefit back at a rate of 1% for every extra £200 you earn. The payment disappears entirely once you earn more than £80,000 a year. But you may be able to hang on to more of your Child Benefit with a simple trick, Ian Futcher explains. He said: 'If your earnings are close to the threshold, using pension contributions or salary sacrifice to reduce your taxable income could allow you to keep more of your Child Benefit.' For example, if you earned £61,000 a year then paying £1,000 into your pension would allow you to keep all of your Child Benefit. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
Glasgow Times
20-06-2025
- Automotive
- Glasgow Times
Pensioners' HMRC tax codes to change for Winter Fuel Payment
Following the announcement that pensioners who receive under £35,000 a year will now receive winter fuel allowance, HMRC has confirmed it will take back the money from those with incomes above £35,000 through their tax codes, or by asking them to complete a self-assessment tax return. HMRC said: "Winter Fuel Payments will be paid automatically without a claim, and any charges will be collected via PAYE, or via self-assessment for those with other income to declare." What is a tax code? It may look like a secret code, but the formula is pretty simple (and explained below). The most common HMRC tax code is 1257L, which is based on the Personal Tax Allowance of £12,570 - this is the amount you can earn before you need to pay tax. But, many people are paying too much tax - as we go into the HMRC tax year 2025 - 2026 it's worth making sure you aren't one of them - and if so, look at how to get a rebate. Your tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension. HM Revenue and Customs (HMRC) will tell them which code to use. How to check your tax code You can find your tax code: by checking your tax code for the current year online - you'll need to sign in to or create an online account on on the HMRC app on your payslip on a 'Tax Code Notice' letter from HMRC, if you get one This week's 'Joker' #martinlewis break bumper: If you have a 1250L tax code - what does the number bit stand for? a) Just an ID code b) You can earn 10x that number tax free each year c) It's your additional allowance on top of the standard allowance — Martin Lewis (@MartinSLewis) February 17, 2020 If you check your tax code online or in the HMRC app, you can also: find your tax code for previous tax years sign up for paperless notifications - this means HMRC will email you when your tax code changes Check what your tax code means You can use the HMRC tax code checker to find out: what the numbers and letters in your tax code mean how much tax you will pay what you may need to do next What the numbers mean in your HMRC tax code The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year. HMRC works out your individual number based on your Personal Allowance and income you have not paid tax on (such as untaxed interest or part-time earnings). They also consider the value of any perks you get from your employer (such as a company car). HMRC tax code letters and what they mean The full list can be found on the website, but these are the most common, and what they mean: L - For an employee entitled to the standard tax-free Personal Allowance S - For an employee whose main home is in Scotland BR/ SBR - For a second job or pension M - For an employee whose spouse or civil partner has transferred some of their Personal Allowance (through Marriage Allowance) N - For an employee who has transferred some of their Personal Allowance to their spouse or civil partner (through Marriage Allowance) T - When HMRC needs to review some items with the employee Recommended reading: How to claim back tax with an HMRC tax rebate If you think you are on the wrong tax code, you can contact HMRC on 0300 200 330 or speak to an advisor online via their live chat service. HMRC will contact your employer to correct your tax code and you will get any money you overpaid in tax in your next payslip. You can also claim back up to four additional years if you have been overpaying for some time.
South Wales Argus
20-06-2025
- Automotive
- South Wales Argus
Pensioners' HMRC tax codes to change for Winter Fuel Payment
Following the announcement that pensioners who receive under £35,000 a year will now receive winter fuel allowance, HMRC has confirmed it will take back the money from those with incomes above £35,000 through their tax codes, or by asking them to complete a self-assessment tax return. HMRC said: "Winter Fuel Payments will be paid automatically without a claim, and any charges will be collected via PAYE, or via self-assessment for those with other income to declare." What is a tax code? It may look like a secret code, but the formula is pretty simple (and explained below). The most common HMRC tax code is 1257L, which is based on the Personal Tax Allowance of £12,570 - this is the amount you can earn before you need to pay tax. But, many people are paying too much tax - as we go into the HMRC tax year 2025 - 2026 it's worth making sure you aren't one of them - and if so, look at how to get a rebate. Your tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension. HM Revenue and Customs (HMRC) will tell them which code to use. How to check your tax code You can find your tax code: by checking your tax code for the current year online - you'll need to sign in to or create an online account on on the HMRC app on your payslip on a 'Tax Code Notice' letter from HMRC, if you get one This week's 'Joker' #martinlewis break bumper: If you have a 1250L tax code - what does the number bit stand for? a) Just an ID code b) You can earn 10x that number tax free each year c) It's your additional allowance on top of the standard allowance — Martin Lewis (@MartinSLewis) February 17, 2020 If you check your tax code online or in the HMRC app, you can also: find your tax code for previous tax years sign up for paperless notifications - this means HMRC will email you when your tax code changes Check what your tax code means You can use the HMRC tax code checker to find out: what the numbers and letters in your tax code mean how much tax you will pay what you may need to do next What the numbers mean in your HMRC tax code The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year. HMRC works out your individual number based on your Personal Allowance and income you have not paid tax on (such as untaxed interest or part-time earnings). They also consider the value of any perks you get from your employer (such as a company car). HMRC tax code letters and what they mean The full list can be found on the website, but these are the most common, and what they mean: L - For an employee entitled to the standard tax-free Personal Allowance S - For an employee whose main home is in Scotland BR/ SBR - For a second job or pension M - For an employee whose spouse or civil partner has transferred some of their Personal Allowance (through Marriage Allowance) N - For an employee who has transferred some of their Personal Allowance to their spouse or civil partner (through Marriage Allowance) T - When HMRC needs to review some items with the employee Recommended reading: How to claim back tax with an HMRC tax rebate If you think you are on the wrong tax code, you can contact HMRC on 0300 200 330 or speak to an advisor online via their live chat service. HMRC will contact your employer to correct your tax code and you will get any money you overpaid in tax in your next payslip. You can also claim back up to four additional years if you have been overpaying for some time.
Business Mayor
14-05-2025
- Business
- Business Mayor
Why getting married could have more financial benefits than you think
Whether you're already married, engaged, or dreaming of your perfect 'big day', there's more to getting hitched than just love. Granted, the latter is typically the main reason people tie the knot: to show their commitment to one another. But aside from the lovey-dovey stuff, there are also some financial benefits to the act. 'Romance can cost a fortune, but marriage can pay,' says Sarah Coles, head of personal finance at Hargreaves Lansdown. 'If you end up tying the knot or entering into a civil partnership, there are lots of financial rules you can take advantage of, and save a fortune.' Here are some of the reasons why getting down on one knee might be good for your wallet (once you've paid off the wedding costs). 'All that I have I share with you' means different things to different couples, but sharing your tax allowance has a lot more benefits than sharing a toothbrush. The Marriage Allowance (which can also be used by those in civil partnerships) allows a spouse who isn't using all of their Personal Allowance to allocate 10% of it to their husband or wife. This is the amount that everyone is entitled to earn without paying any tax. The standard Personal Allowance is £12,570. Are you a high earner? The allowance decreases by £1 for every £2 you earn above £100,000. This means if you earn above £125,140, you won't have a Personal Allowance. Love reading juicy stories like this? Need some tips for how to spice things up in the bedroom? Sign up to The Hook-Up and we'll slide into your inbox every week with all the latest sex and dating stories from Metro. We can't wait for you to join us! Only couples where the higher earner takes home under £50,270, and so pays basic rate tax, are eligible. If you are in this position, the Marriage Allowance can save you £252 a year. You can backdate this too, all the way back to 2021 if you have been in this position since then. If you think you might be entitled to Marriage Allowance, use the government's calculator to check and contact the taxman yourself to apply. Married couples and those in civil partnerships are able to pass assets between them without HMRC deciding that there is a tax bill to pay. This can ensure that you use both of your personal allowances for income and capital gains tax to pay as little as possible. Coles explains that, as well as the Personal Allowance that means you don't pay tax on the first slice of income, you also have a Personal Savings Allowance, Dividend Allowance and Capital Gains Tax allowance, which means you don't pay tax on the first slice of savings interest, dividend payments or profit from selling investments. 'You can share your investments and savings between you, so you both take full advantage of all these allowances. Any extra can be held by the lowest taxpayer, so you pay the absolute minimum in tax,' she says. 'If an unmarried couple tried to do this, passing ownership to their partner could actually trigger a tax bill.' Unromantic as this might seem during the early stage of a relationship, the marriage vows we make are 'until death us do part', and some of the biggest financial perks of married life aren't felt by us, but by our descendants, who may benefit from a lower inheritance tax bill if their parents are married. This is because married couples, and those in civil partnerships, can leave unlimited wealth to their spouse or civil partner without triggering an inheritance tax bill. Your spouse can also inherit your unused £325,000 tax-free allowance and £175,000 'residence nil rate band' (also known as the 'main residence' band) to allow them to pass on more wealth tax-free when they die. Inheritance tax is levied at a hefty 40% on anything above the £325,000, so it can cut into your legacy for your children considerably. Sean McCann, chartered financial planner at NFU Mutual, also points out that, because the tax has to be paid within six months of the death and before the assets can be passed to the beneficiaries, it can leave an unmarried but bereaved member of a couple in a difficult situation. 'For cohabiting couples, if your partner leaves you chargeable assets valued at more than £325,000, you will pay 40% in tax on the excess,' he says. 'This often leaves the surviving partner having to deal with a large, unexpected tax bill, when they are at their most vulnerable.' Jason Hollands, managing director at investment group Tilney Bestinvest, adds that if you make gifts to your spouse or civil partner during your lifetime, they don't count within the seven-year rule for inheritance tax purposes. 'Where an individual makes a gift of capital or assets to another individual during their lifetime – perhaps a car or high value piece of jewellry – it may be classed as a Potentially Exempt Transfer and, should death occur within seven years from the date of the gift, the beneficiary may be liable to inheritance tax, a nasty surprise if they don't have the resources to pay. However, gifts between spouses or civil partners are not Potentially Exempt Transfers. They're ignored for inheritance tax purposes altogether.'
