Lockdown measures may be easing in parts of the UK, however the pandemic has prompted some employers to take serious measures when it comes to the future of the business. For some, sadly, this means a pay cut, while others may be being made redundant.
For many, a reduction in income will no doubt cause difficulties when it comes to household outings.
However, for those who are feeling the stretch financially, it may be that there are ways they can slightly reduce the impact.
It’s something which Kay Ingram, Public Policy Director at LEBC Group, has highlighted.
Ms Ingram, who is a chartered financial planner, explained that some may be able to cut their tax outgoings by hundreds of pounds each year.
This can be done by claiming the Marriage Allowance.
And, there’s a huge number of people who could be entitled to the tax break.
HMRC estimates there may be more than a million couples eligible for the tax allowance, who have not yet claimed it, she said.
Ms Ingram continued: “Many more may become eligible if as a result of furlough or redundancy their incomes fall.”
So, what is the Marriage Allowance, and what savings could be had?
“Marriage Allowance is available to married couples and civil partners,” the financial planner explained.
“If one of a couple is a non taxpayer (income less than £12,500 per year) and the other is a basic rate taxpayer (income £12,500 to £50,000) the non taxpayer can elect to give up 10 percent of their Personal Allowance, worth £1,250 to the higher earner.
“This increases the amount of tax free income the higher earner can revive before tax at 20 percent is due.
“For all four years and the current year that could be worth £1,188.”
Reiterating that it may be an option for couples who have seen their income affected during the coronavirus pandemic, she added: “Couples whose income is falling due to furlough or redundancy and who may now be eligible should make a claim.
“If their income increases later so they are no longer eligible, they can give up the allowance but should review it on a tax year basis.”
However, there is an important aspect of the Marriage Allowance to be aware of, and this is that cohabiting couples are not eligible.
That’s because being married or in a civil partnership is required in order to claim.