If you’re married or in a civil partnership, you could be missing out on a tax break worth £252 a year. And if you’ve never claimed the Marriage Allowance before, you could be due a whopping £1,220 windfall.
Over four million couples are eligible for the Marriage Allowance, (also called the Marriage Tax Allowance), according to estimates from HM Revenue & Customs, only two million claim it, meaning over two million households could be missing out on some free cash.
Here’s how to find out if you’d be eligible and how to claim.
What is the Marriage Allowance?
The Marriage Allowance is a tax break that enables couples, who are married or in a civil partnership, to give the other a slice of their tax free personal allowance, to save on tax.
The amount you can give is a fixed £1,260 a year, and to make this work, one partner must be a non-taxpayer, or earn less than the annual tax free personal allowance (opens in new tab) of £12,570. Essentially, this means you're giving up £1,260 of your £12,570 tax free allowance and 20% of that is £252 - so that's what you're getting back in the current tax year.
Your partner must be a basic rate taxpayer, paying the 20% rate of income tax. This means earnings and income must be between £12,571 - £50,270 a year. Limits are slightly different if you live in Scotland.
Who can claim the Marriage Allowance?
You can claim the Marriage Allowance if you are married or in a civil partnership, and were both born on, or after 6 April 1935. However, if you are a couple simply living together, you cannot claim it.
If you or your partner were born before 6 April 1935, you can’t claim the Marriage Allowance and may be better off claiming the Married Couple’s Allowance (opens in new tab) instead.
How to claim the Marriage Allowance
It’s the non-taxpayer, or lower earning partner who must apply for the Marriage Allowance. You can do this online through the Government website (opens in new tab), where you can also find out how to apply for it via the self-assessment tax system.
You’ll need details including National Insurance numbers for both you, and your partner, along with proof of ID, like passport details and P60.
Once you’ve submitted your application, you should get a confirmation email within 24 hours. There’s no need to reapply each year, as the marriage allowance will continue automatically.
However, if your circumstances change and you are no longer eligible to claim, say if you have split up with your husband or wife, or your income has increased, you must tell HM Revenue & Customs (opens in new tab).
How much is the Marriage Allowance worth?
It’s worth £252 in the current tax year, but if you haven’t claimed before, you can claim for the current tax year, (2021-22), plus the previous four tax years, which can be up to a total of £1,220.
There’s a handy marriage allowance calculator (opens in new tab) on the Government website that helps you work out how much you can save by claiming the Marriage Allowance.
When it comes to how you get the extra money, it’s not cash in hand. The way it works is that the higher earning partner will usually get an adjustment to their tax code, which means they’ll pay less tax each month. The ‘new’ code will usually include the letter ‘M’, to show they’re claiming the Marriage Allowance.
If the higher earning partner is self-employed, any tax adjustment will usually be made when they file their annual self-assessment form.
Can you backdate it if you missed out?
If you haven’t claimed the Marriage Allowance before, then providing you are eligible, you can claim for previous years up to a total of £1,220, but you’ll need to be quick.
Claims can currently be backdated as far as 5 April 2017. However, 5 April 2022 is the last day you can go as far back as 5 April 2017, as the new tax year starts from 6 April, which means from then, you can only claim back as far as 5 April 2018.
When it comes to paying out on backdated claims, HMRC will usually pay by bank transfer or send a cheque.
You can still claim retrospectively if your partner has died since 5 April 2017. The best way to do this is by calling the income tax helpline (opens in new tab) on 0300 200 3300.
Sue Hayward is a personal finance and consumer journalist, broadcaster and author who regularly chats on TV and Radio on ways to get more power for your pound. Sue’s written for a wide range of publications including the Guardian, i Paper, Good Housekeeping, Lovemoney and My Weekly. Cats, cheese and travel are Sue’s passions away from her desk!