The marriage allowance can help couples whose salaries have been reduced due to the coronavirus pandemic - but you should be careful about how you apply.
Which? has heard from a number of people who've unwittingly lost out on almost half of their marriage allowance claim to a tax refund company called Marriage Allowance Claims Ltd. They thought they were dealing directly with HMRC.
Here, Which? explains what marriage allowance is, how to apply to HMRC for free and what to look out for if you use a tax refund company to act on your behalf.
Marriage allowance is a tax break for those who are married or in a civil partnership with a relatively low joint income and aims to reduce their household's tax liability.
For the 2020-21 tax year, it could save you a modest £250 - but you can backdate the claim by up to four years, meaning you could end up with a payout of more than £1,100.
Marriage Allowance Claims Ltd is a tax refund company. Its terms mean that the firm pockets 42% of successful marriage allowance claims, leaving you with just over half of what you're entitled to.
The company's advertising strategy has seen it regularly pop up on social media and YouTube, and last month its ad was appearing at the top of Google's search results for the term 'marriage allowance', which receives 49,500 searches each month.
Since then, however, it has stopped accepting new claims and states on its website: 'Existing claims will continue to be processed as normal, however we are not accepting new applications.'
Which? has heard from two couples who made claims through Marriage Allowance Claims Ltd, but had thought they were dealing directly with HMRC.
Marriage Allowance Claims (MAC) told us that it works closely with HMRC and that it has adopted all feedback from HMRC with regard to the forms and applications used by MAC. It says that it takes all client issues seriously, tries to resolve issues quickly, efficiently and equitably, and did not intend for Robert and David to believe they were dealing with HMRC directly.
MAC also told us that pricing is set out for customers at the commencement of a claim on its website and by email upon registration.
David and his wife, Anne (not their real names), didn't realise they had signed up to Marriage Allowance Claims Ltd until HMRC informed them that their claim had been successful.
'My wife responded to one of its [Marriage Allowance Claims Ltd] Facebook posts, which said 'click here to check your eligibility for a married person's allowance rebate,' David says. 'It was a couple of months before Christmas and finances are usually quite tight, so we would have been grateful for the extra money. She clicked the link, put in our details and was told we'd be eligible for a rebate of up to £950.'
The website prompted Anne to press a button to request forms to be sent to them. Receiving them a few days later, she filled out their details and sent them back.
Several weeks later, Anne received a letter from HMRC to say their claim had been processed and that a cheque for £650 would be issued.
'When Christmas had passed and we still had not heard anything further, I contacted HMRC to ask about the progress of our claim,' says David. 'I was told the cheque had already been issued to a third-party company and we would have to contact them.
'This came as a shock to us, as we thought we were dealing with HMRC the whole time.'
David says he admits he perhaps didn't engage the issue with due diligence, but also asserts that Marriage Allowance Claims Ltd had used fonts and headers very similar to those used in HMRC's documents.
'Once our cheque arrived it was for £360. Whenever I think about it I feel angry and frustrated.'
Robert (not his real name) and his wife, are a single-income family with a disabled daughter. They also thought they were dealing with HMRC when making their marriage allowance claim, due to Marriage Allowance Claims Ltd's paperwork and online forms having similar fonts and headers to official HMRC documents.
Robert's wife had received an email from Marriage Allowance Claims Ltd, which she believed was sent from HMRC. The email contained a link, which took her directly to the section of the Marriage Allowance Claims Ltd website which asks several questions to check your marriage allowance eligibility.
She answered the questions and completed the online form, which she also thought was through HMRC.
'We received paperwork in the post, which my wife completed and submitted,' says Robert. 'There was no indication of charges.
'We were sent an email to say our application was successful, and finally received a cheque in the post on Monday 20 April 2020. It left us in shock.
'It clearly showed that Marriage Allowance Claims Ltd was taking just over £400 of the £898.81 owed to us by HMRC. It also shows that they were charging us VAT payable to HMRC.
'We are extremely upset about this. We need every penny, especially at this difficult time.'
In many circumstances, when people feel they have wrongly lost money, they turn to the regulators for help.
However, in this instance, there is little claimants can do.
While we think that MAC ought to have been clearer, they haven't broken any law.
Marriage Allowance Claims Ltd operates a little like a claims-management company (CMC), in that it files for a claim on a customer's behalf, but it's actually registered on Companies House for 'general public administration activities'.
The company, therefore, doesn't need to be FCA registered, meaning it's not regulated. Furthermore, as the marriage allowance is not a regulated product and HMRC is not a financial services company, the services are not covered by the Financial Services Compensation Scheme (FSCS) and people can't make complaints to the Financial Ombudsman Service (FOS).
However, it may be worth directing any complaints you have to HMRC.
When we asked HMRC about people using tax refund companies to claim marriage allowance, a spokesperson said: 'We do not accredit or in any way approve agents and take firm action against any who are not complying with the law.
'We encourage customers to come directly to HMRC to make their marriage allowance claim. It takes only a few minutes to complete the online application and eligible claims receive 100% of their entitlement.
'It's important that people thinking of using a tax agent are clear in advance about fees and satisfy themselves that they will get the service they sign up for.'
Is it really feasible that people don't realise they're not dealing directly with HMRC?
We've looked at Marriage Allowance Claims Ltd website to compare it with similar sections of the HMRC website that deals with marriage allowance.
Both feature a series of questions which can help determine whether or not you could be eligible to claim marriage allowance.
The screenshots below show the two sites:
In addition to the content and wording of the questions being similar, Marriage Allowance Claims Ltd has used some similar colours as HMRC's website. Most noticeably, both websites feature distinctive coloured boxes in a shade of green, which could suggest, to someone not paying attention that the two are linked.
Here are letters and email correspondence from Marriage Allowance Claims Ltd next to letters and emails from HMRC. Personal details have been redacted.
Robert said he felt wording such as 'this email is to inform you that the HM Revenue & Customs (HMRC) Repayments Team have reviewed your application' suggested that Marriage Allowance Claims Ltd was part of HMRC.
The email also doesn't point out that the 'confirmation in writing of the amount you have been awarded' is sent by HMRC, whereas the 'repayment cheque' is sent from Marriage Allowance Claims Ltd - again suggesting that the whole process is being carried out by the same people.
Similarities can also be seen here between the two logos. While HMRC's logo is of a crown, the two circles used by Marriage Allowance Claims Ltd to presumably represent wedding rings are positioned in a way that creates a similar shape, with a heart in the place of the 'jewel' at the top of HMRC's logo. At a glance, it wouldn't be difficult to confuse the two.
In the first letter from Marriage Allowance Claims Ltd, sent to urge a customer to complete their application, the company's correspondence address is listed as just 'Marriage Allowance', rather than using its full 'Marriage Allowance Claims' name.
There's no reference to any steps being taken by any company other than HMRC; 'an HMRC Office will review your application and payment will be made by cheque' and a box has been highlighted as 'important HMRC guidance'.
Nowhere does the letter mention the fact that Marriage Allowance Claims will, in fact, make the actual application to HMRC on the customer's behalf, be receiving the cheque on the customer's behalf and taking a cut of the tax refund received.
Even in the final letter, HMRC is mentioned far more than Marriage Allowance Claims Ltd. It refers to 'your HMRC calculation', 'HMRC Repayments Team', which have not issued this letter, and includes 'VAT (Payable to HMRC at 20%), which has not been charged on the individual's marriage allowance payment but on MAC's earnings. The frequent mentions of HMRC, though, all go some way to try and suggest that the company may be linked in some way with the government department.
Marriage Allowance Claims Ltd is one of many tax refund companies, some of which can be helpful, particularly in circumstances where you need to have specialist knowledge, or if the process of making a claim is very time consuming and requires multiple follow ups.
Before opting to use a tax refund company, you should ask yourself a few questions: