Hmrc tax-free personal allowance and how you can get an extra £1,200

The tax-free Personal Allowance has been frozen for several years, and unless there's an unexpected reversal from the Government, it is set to remain at its current level for at least

another four years, until 2028. This means that due to 'fiscal drag', an increasing number of people will end up paying more tax on their earnings as wages rise to counter

inflation, and more individuals earn money that becomes subject to income tax. The Personal Allowance, the amount you can earn before you start paying tax, remains fixed at £12,570, where it

is expected to stay until at least 2028. This means everything you earn above this threshold is taxed at 20%, or 40% on earnings above £50,270 for a higher rate taxpayer and 45% on earnings

above £125,000 for an additional rate taxpayer. However, there is one method to increase your tax-free Personal Allowance - but it requires being married or in a civil partnership. Married

couples or those in a civil partnership can boost their tax-free take-home pay by £252 annually and can also backdate their claim. This applies to up to four separate tax years if you

backdate the claim. This could result in a tax rebate of up to £1,258, reports the Express. HMRC will then adjust your tax code to provide you with the money you're owed, which when

added to the standard Personal Allowance for the year (£12,570) totals £13,830 tax-free instead of £12,570, giving you the £1,260 for the four years' worth of £252. To qualify, one

partner must be a non-taxpayer, earning less than £12,570. This could apply if one of the couple is not currently working, has lost their job or is taking a career break for childcare. The

other partner must be a basic rate taxpayer, earning between £12,570 and £50,270 (after pension contributions are deducted). This scheme, known as the Marriage Allowance, allows the

lower-earning partner to transfer £1,260 of their Personal Allowance to their partner, reducing their tax bill by £252 for each year claimed (20% of £1,260). For the 2024-25 tax year, a

slight adjustment was made that also permits someone earning between £11,130 and £12,570 to transfer their Personal Allowance. However, earnings within this range are still subject to tax.

The saving is still beneficial, though not as substantial as for those earning less than £11,130. Claims can only be backdated for the current year and the previous four financial years.

Therefore, 2020-21 is now too far back to claim, but you can claim for this current year and the past four back to 2021-22.