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Tax break for married couples from April 2015

Marriage Allowance (previously referred to as Transferable Allowances for Married Couples and Civil Partners) will be introduced from April 2015.

tax break for married couplesHMRC has asked Carval to tell our payroll software users about a new tax break for married couples. Uniwage v5.4 already supports the two new tax code suffixes so our payroll system users are all ready for this change.

Where neither spouse is liable to income tax above the basic rate, individuals will be able to transfer part of their tax free personal allowance to their spouse or civil partner. For the 2015 - 2016 tax year £1,060 will be transferable, representing a saving of up to £212 per year for eligible couples.

Registering for marriage allowance is simple and quick – and it is all done at www.gov.uk/marriage-allowance. There’s guidance for couples to check their eligibility for the new allowance, and registration only takes about three minutes. From April we will start inviting those customers who have registered their interest to be among the first to apply using our new online service. Customers who choose not to register early will not lose out; they will be able to make an application later in 2015-16 and still receive the full annual allowance.

To support the change both the transferor and recipient’s tax codes will have to be amended. This will in turn introduce two new tax code suffixes. They will be:-

  • M will be used for the spouse/civil partner receiving the transferred allowance
  • N will be used for the spouse/civil partner transferring the allowance.

These new tax suffixes will not be used on tax codes prior to April 2015 and were not be included on the P9 tax codes issued for 2015-16. The suffixes will be used on P6 coding notices from April and, in due course, P9 and P9X uprating notices.

For more details, see the announcement Registration opens for new married couples tax break  at https://www.gov.uk/government/announcements?departments%5B%5D=hm-revenue-customs.

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