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November 2018 – Help claiming your allowance

Are you claiming all of your allowances?

You may be missing out on extra tax allowances just because you didn’t know about them. Ignorance is not always bliss! Most of you will know that we all have a tax free personal allowance of £11,850 this year, (6 April 2018 to 5 April 2019) which means that you only pay tax on the income you receive above this amount. However, there may be other allowances that can be claimed if you meet certain criteria. We would like to make you aware of three allowances that are available to so many of you but often not claimed.

That’s right, you have to ask HMRC to apply these allowances.  If you don’t, you won’t get them.

If you have difficulty contacting HMRC or, if the whole idea confuses you, please contact us so that we can support or guide you to make a claim.

Married Couple’s Allowance (MCA)

This allowance benefits couples who are married or in a civil partnership where at least one of the couple was born before 6 April 1935. It reduces the amount of tax you pay by up to £869 in the current tax year, which can cut your tax bill to zero.

The effect this year is the same as having an extra £4,348 tax free allowance.

HMRC will usually allocate this extra allowance to the highest earner, but you can apply to HMRC for some or all of the allowance to be transferred to your spouse using form 575(T).

You can also ask HMRC at the end of each tax year to transfer any surplus MCA if that is more beneficial.

Contact HMRC online at www.gov.uk/married-couples-allowance, by telephone on 0300 200 3300 or by post to HM Revenue and Customs. BX9 1AS.

Marriage Allowance (MA)

This allowance started in the 2015/16 tax year. It allows a couple who are married or in a civil partnership to transfer a specific amount of their unused tax free allowance to their spouse or partner. So one of the couple must be a non-taxpayer and the spouse pays tax at no higher than basic rate, 20%.

The amount that can be transferred is 10% of the annual tax free allowance (currently £11,850) meaning that £1,190 can be transferred this year which will save you up to £238 in tax.

This allowance can be backdated to the 2015/16 tax year.  It is important to remember that this transfer must be claimed by the spouse/partner who is giving up the allowance.

The easiest way to claim is online at www.gov.uk/marriage-allowance, by telephone on 0300 200 3300 or by post to HM Revenue and Customs. BX9 1AS.

Please note, a married couple who are old enough for the Married Couple’s Allowance cannot use the Marriage Allowance transfer as well.

Blind Person’s Allowance (BPA)

This allowance is available when a tax payer is registered Severely Sight Impaired (SSI); remember, you don’t have to be completely blind. If your Ophthalmologist decides you are SSI and issues you with form CV1 you can contact your local authority to get registered with a number. You can then contact HMRC to claim the allowance, which is £2,390 for 2018/19.

If you can’t use the allowance because your income is too low you can transfer it to your spouse or civil partner, using form 575(T). Claiming BPA can save you paying £478 in tax this year.

In Scotland and Northern Ireland the process and qualifying criteria are slightly different. You need to be issued with a BP1 certificate in Scotland and an A655 in Northern Ireland.

To claim this allowance contact HMRC, online at www.gov.uk/blind-persons-allowance, by telephone on 0300 200 3300 or by post to HM Revenue and Customs. BX9 1AS.

Posted in: Tax Tips