Eligible married couples, and those in civil partnerships, could reduce their tax by up to £252 a year by signing up to the Marriage Allowance.

HMRC have urged taxpayers to remember this benefit in a press release from 2nd August, and to check if they are eligible to sign up.

What is the Marriage Allowance?

Marriage Allowance allows married couples or people in civil partnerships, including those who have been together for many years, to share their personal tax allowances if one partner earns below the Personal Allowance threshold of £12,570, and the other is a basic rate taxpayer.

Eligible couples can transfer 10% of their tax-free allowance to their partner, which is £1,260 in the 2022/23 tax year.

This means that couples can reduce the tax they pay by up to £252 a year. They can apply any time and, if eligible, could backdate their claims for up to four previous tax years to receive a payment of up to £1,242.

It is free to apply for the Marriage Allowance, and customers are reminded to claim directly via HMRC’s online portal to ensure they receive 100% of the tax relief they are eligible for.

Who is eligible?

As discussed, to be eligible for the relief, one partner must be earning below the Personal Allowance threshold, and the other must be a basic rate taxpayer.

You must be married or in a civil partnership. Unfortunately, you cannot claim Marriage Allowance if you’re living together but are not married or in a civil partnership.

More than 2 million couples currently benefit from the allowance, but there could be thousands more who have not realized they are eligible or have not heard of the benefit. Hence, HMRC’s desire to publicise the allowance during this time of great financial hardship for many.

Even if couples don’t qualify for Marriage Allowance at this time, a change in circumstances could mean they become eligible. These include:

  • One partner retiring and the other remaining in work
  • Change in employment
  • Reduction in working hours which means their earnings fall below their Personal Allowance
  • Maternity, paternity, or shared parental leave
  • Unpaid leave or a career break
  • One partner studying or in education and not earning above their Personal Allowance

Furthermore, if a spouse or civil partner has passed away since 5th April 2018, the surviving person may still be eligible to claim.

Once you have successfully claimed Marriage Allowance, it will be automatically renewed each year.

The onus is on the taxpayer to inform HMRC if their circumstances change, and eligibility is impacted.

How to apply

The quickest way to apply for Marriage Allowance is online. The online application form can be accessed here.

You will get an email confirming your application within 24 hours.

You can also apply via Self-Assessment if you’re already registered and send tax returns, or by writing to HMRC if you prefer.

As always, if you would like any further information regarding the above, please feel free to contact our offices by email info@williamsoncroft.co.uk.