I got £250 free cash while on maternity leave with little-known tax break – how you can too
PREGNANT mums could be entitled to a tax break worth hundreds of pounds - as teacher Lisa Sudlow-Lane found out.
Mum-of-one Lisa Sudlow-Lane, 30 and her husband Nathan, 32, claimed back £250 in tax after finding out they were eligible for marriage allowance.
Marriage allowance is available to couples who are married or in a civil partnership, where one person earns less than the personal allowance threshold of £12,750.
You can transfer £1,260 of your personal allowance to your partner, reducing their tax bill.
Lisa, who lives in Rotherham, gave birth to her daughter Rosalie in 2020 while she was working as a sales advisor and Nathan was working for Sky.
While Lisa was on maternity leave, her income fell below £12,570 - the personal allowance threshold.
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This meant Lisa, who was earning £20,000, was bringing home around £1,000 less a month than she was while she was working.
After 11 months, Lisa resigned from her job after they couldn't accommodate her request for flexible working.
Lisa was then out of work for six months before she decided to take a position as a part-time French teacher at a secondary school.
During this time, the couple were mostly relying on Nathan's income and had to take around £5,000 from their savings to afford their monthly bills.
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It wasn't until she returned to her new job that Nathan found out from a colleague at work that the pair could claim marriage allowance.
Lisa said: "I had previously heard of marriage allowance from government adverts on social media, but I had even considered we would be eligible.
"I looked on the government website and used its eligibility calculator to check if it would be worth applying and I couldn't believe it when it said we were eligible.
"I didn't think that we would be able to claim while I was on maternity leave.
"The application was really easy and it only two around two months to get the money straight into our bank account."
Lisa and Nathan got £250 worth of tax back from HMRC because they claimed for the tax year 2020/21.
The amount you can get backdated varies depending on the tax year you claim for.
The pair said they used the money to cover the cost of a weekly shop and other essentials.
"I've learnt that it's always worth checking to see if you're eligible for any help if there's a big difference in salaries," Lisa said.
"I was so pleased to find out that I could apply for the time I was on maternity leave, but I don't think many people know about it.
"I found the whole application really easy and I definitely think more people should do it."
HMRC said it wants eligible couples to benefit from marriage allowance tax relief, if they are eligible.
Angela MacDonald, HMRC’s deputy chief executive and second permanent secretary, said: "Couples whose circumstances have changed – perhaps one of them has stopped working or taken a lower paid job – may not realise they are entitled to claim."
Who is eligible for marriage allowance?
You can claim marriage allowance if all the following apply:
- you’re married or in a civil partnership
- you do not pay income tax or your income is below your personal allowance (usually £12,570)
- your partner pays income tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive marriage allowance
You cannot claim marriage allowance if you’re living together but you’re not married or in a civil partnership.
You can backdate your claim to include any tax year since April 5, 2018, that you were eligible for marriage allowance.
Your partner’s tax bill will be reduced depending on the personal allowance rate for the years you’re backdating.
To work out how much you will get you can use the government's .
How can I apply for marriage allowance?
You can apply for marriage allowance for free online through the .
If both of you have no income other than your wages, then the person who earns the least should make the claim.
If either member of the couple gets other income, such as dividends or savings, you can call the to work out who should claim.
HMRC will then give the allowance you've transferred to your partner by changing their tax code or when they've sent their self assessment tax return.
Bear in mind that it can take up to two months to change a tax code.
If your new Personal Allowance is lower than your income after you’ve made a claim, you might have to pay some income tax. However, you might still benefit as a couple.
Can I backdate my marriage allowance claim?
You could claim back hundreds of pounds worth of tax, but you have to act fast.
For the 2021/22 tax year, you can claim a tax break worth up to £252.
In addition to this year's allowance, you can also get it for the previous four tax years -currently 2018/19, 2019/20 2020/21 and 2021/22.
The tax break was worth £238, £250, £250 and £252 during those years respectively, meaning you can get up to £1,242 in total.
But you can only backdate it by four years.
You could miss out on £238 if you don't apply before April 5 this year.
Once you've claimed you won't need to apply again, but you should let HMRC know if you stop being eligible.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the fact you can backdate it means you can get up to £1,242.
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She said: "When money is tight – especially on maternity leave – this can make an enormous difference.
"There could be over two million couples who qualify but aren’t claiming, so it’s worth checking whether some of this cash has your name on it."
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