Yahoo News HMRC puts focus on 'two million' married couples in tax sting
Experts have warned the HMRC is targeting pensioner couples in a new tax raid. Around two million married couples and civil partners who claim Marriage Allowance as a tax benefit could now find themselves targeted.
BirminghamLive reports how the tax perk applies where one partner pays basic rate income tax at 20 per cent, while the other earns less than the £12,570 personal allowance and therefore pays no tax. It allows the lower earner to transfer £1,260 of their personal allowance to their spouse or civil partner.
It saves up to £252 this tax year. But pensions campaigner Ros Altmann has warned that couples who have taken advantage of this could face an unexpected income tax bill as a result.
She said: "Many may have no idea they need to pay tax at all, especially if they have never been liable before."
She said the number of pensioners liable for tax has doubled since 2010, from 4.5 million to more than nine million. She warned: "Pensioners who use the marriage allowance to give part of their personal allowance to their partner will have an even lower personal allowance of just £11,310.
"They are already at risk of being liable for tax without knowing." She added: "They risk being hit with fines and penalties for not paying a tiny amount of tax that they didn't even know about."
Stephen Lowe, director at the retirement specialist Just Group, has also spoken out. "With the state pension increasing many will see marriage allowance benefits reduced or reversed," he said.
Stephen said "alarm bells should ring" among couples where the non-taxpayer's taxable income is likely to be above the £11,310 reduced personal allowance."
He added: "The whole £1,260 of personal allowance has to be transferred, so where non-taxpayer's income is above £11,310, they may be pulled into starting to pay tax without giving an equal or bigger tax-saving to their partner."
He added: "The first some couples will know is when they see more tax is being taken or receive a letter from HMRC asking for the extra."
