Tax-free Personal Allowance raised to £13,830 for ‘backdating’ households

Married or civil partnership households can increase their tax-free allowance by utilizing the Marriage Allowance. This allows the lower-earning partner, who must earn under £12,570 and pay no income tax, to transfer £1,260 of their Personal Allowance to their partner. The higher-earning partner must be a basic rate taxpayer. This transfer reduces the tax bill by £252 annually. The key benefit highlighted is the ability to backdate this claim for up to four previous tax years. By backdating, couples can receive a lump sum rebate, effectively increasing their tax-free earnings to £13,830 per year for those four years, rather than the standard £12,570. This means a potential tax rebate of up to £1,258, spread over the backdated period. Eligibility requires one partner to earn below the Personal Allowance threshold, often due to unemployment or childcare responsibilities, w... download the app to read more