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Tax allowances, rebates and tax codes
A client may be eligible to reduce the amount of tax they pay or to receive a tax rebate. When looking at a client’s tax situation, the adviser should check the following.
Tax allowances
The personal allowance is a basic allowance available to most people. Clients who are married or in a civil partnership may be entitled to a transferable tax allowance which allows a set limit of underused personal allowance to be transferred from one partner to the other. If the client or their partner was born before 6 April 1935, they may be entitled to a married couple’s allowance.
A client who is registered blind can claim a blind person’s allowance for the whole tax year. This is in addition to the personal allowance.1gov.uk/blind-persons-allowance
A backdated claim can be made for up to four years for any allowances, so check whether the client has not received an allowance to which they are entitled.
Tax rebate
A client who is unemployed or is laid off may be entitled to a tax rebate at the end of the tax year. This can be reduced or cancelled if they receive a taxable benefit. If HMRC has delayed paying the tax rebate, they must pay interest on it.
Tax code
If a client has an incorrect tax code, they may be paying more tax than they should or may be owed money for overpayment of tax. See gov.uk/tax-codes for help identifing when a client may have an incorrect tax code.