Two ways to reduce your Self-Assessment Bill

Marriage Allowance in the UK

The Marriage Allowance in the UK is a tax benefit for married couples and civil partners. It allows one partner to transfer a portion of their personal tax allowance to the other, potentially reducing the amount of tax they pay.

Eligibility:

1. Relationship Status: You must be married or in a civil partnership.

2. Income Criteria: One partner must have an income below the personal allowance threshold (£12,570 for the 2023/2024 tax year).

3. Higher Income Earner: The other partner must be a basic rate taxpayer, earning between £12,571 and £50,270 (or up to £43,662 in Scotland).

Benefit:

• The lower-income partner can transfer up to 10% of their personal allowance to the higher-income partner, which is £1,260 for the 2023/2024 tax year.

• This transfer can reduce the higher-income partner's tax bill by up to £252 for the year.

How to Apply:

• Applications can be made online through the HMRC website.

• Once approved, the allowance is applied automatically each year unless your circumstances change.

Working from Home Allowance in the UK

The Working from Home Allowance is a tax relief that employees can claim if they are required to work from home.

Eligibility:

1. Work Requirement: You must be required to work from home, either due to your employment contract or because your employer does not provide an office space.

2. Expenses: You must incur additional costs because of working from home, such as higher electricity or heating bills.

What You Can Claim:

1. Flat Rate: You can claim a flat rate of £6 per week from April 2020 without needing to provide evidence of your increased costs. This equates to £312 per year.

2. Actual Costs: If your expenses are higher than £6 per week, you can claim the actual amounts, but you must keep receipts and provide evidence.

How to Apply:

• Claims can be made through the HMRC online portal.

• If claiming the flat rate, the process is straightforward.

• For actual costs, you will need to submit details of your expenses.

Impact on PAYE:

• The tax relief can be reflected in your PAYE (Pay As You Earn) code, reducing the amount of tax deducted from your salary.

Retrospective Claims:

• You can backdate claims for up to four years if you meet the criteria during that period.

These allowances help reduce the financial burden on individuals by offering tax relief, reflecting the government's efforts to support both family units and those adapting to changing work environments.

Only from these two allowances, you can save up to £564 from your tax bill. For more advices, refer to our webpage:

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