The allowance has been available since 6 April 2015 and is worth £212 for 2015-16, £220 for 2016-17 and £230 for 2017-18; a cumulative tax rebate of £662. The allowance is only available to the following couples:
- Couples must be married or in a formal civil partnership, living together does not qualify.
- One spouse/partner needs to be a non-tax payer. i.e. their income must be below the personal tax allowance. (£10,600 for 2015-16, £11,000 for 2016-17, and £11,500 for 2017-18).
- The other spouse/partner needs to be a basic rate (20%) taxpayer. Higher rate taxpayers cannot receive any benefit from the Marriage Allowance.
The spouse/partner that has the spare personal allowance needs to make the claim, and once made, the relief should automatically be given in subsequent years. You will need to advise HMRC if your circumstances change.
The allowance is simple to claim, just visit the Gov.uk website at https://www.gov.uk/apply-marriage-allownce. And don’t forget, it is the spouse partner who pays no tax (with an unused, or partially unused, personal allowance) that needs to make the claim.
Before making the application you will need to have you and your partner’s National Insurance numbers. You will also need a way to prove your identity. This can be one of the following:
- the last 4 digits of the account that your child benefit, tax credits or pension is paid into
- the last 4 digits of an account that pays you interest
- details from your P60
- details from any of your 3 most recent payslips
- your passport number and expiry date
You’ll get an email from HMRC confirming your application.
- 4 years for goods you still have, or that were used to make other goods you still have
- 6 months for services
- invoices and receipts
- a description and purchase dates
- information about how they relate to your business now
Many employees use their own cars to undertake journeys for their employers. In most cases, employers will pay for this. Generally, they will pay a rate per mile.
HMRC consider this type of mileage payment as tax exempt as long as the rate per mile paid does not exceed a certain amount. Currently, the tax-free rates for cars are:
45p per mile for the first 10,000 business miles in a tax year, and
25p per mile for any additional miles in excess of 10,000.
The same rates per mile apply if you use your own van for business travel.
It is also possible to claim up to 24p per mile for the use of a motorbike and 20p per mile for the use of a bicycle. In both these cases there is no break point at 10,000 miles – you can claim these rates however many business miles you undertake.
Complications arise if you are paid more or less than these agreed rates per mile.
Are you paid more than the approved rates?
If you are paid more, any excess will be treated as a benefit and you will have to pay tax on the difference. Generally, this will be adjusted on the tax code that your employer uses to work out your weekly/monthly tax deduction from salary/wages.
Are you paid less than the approved rates?
If you are paid less than the approved rates per mile, you can claim the difference as a deduction from your taxable income. It’s called Mileage Allowance Relief (MAR).
Consider Jane, who undertook 2,000 business miles for her employer, but was only paid 35p per mile. She can claim 2,000 times 10p (45p – 35p) or £200 against her taxable income.
You will need to advise HMRC of any claim in order to get your tax reduced. If you pay no tax (if your income is below the current personal allowance - £11,000 for 2016-17) there is no tax to recover so a claim is inappropriate.
Your employer can also pay you up to 5p per mile if you carry a passenger as part of your business trip. Again, any payment in excess of this rate will be taxable, but payments of less than 5p per mile cannot be claimed as tax relief.