Marriage Allowance Tax refund – don’t miss out!

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Marriage Allowance

As it is Valentine’s Day, HM Revenue and Customs (HMRC) are encouraging those who are eligible to sign up for the Marriage Allowance, to reduce their tax bill.

This is how Marriage Allowance works:

Married couples and people who are in civil partnerships could be eligible to make a claim. You cannot claim Marriage Allowance if you are living together but you are not married or in a civil partnership.

The Marriage Allowance allows one partner (partner A) to transfer part of their personal tax allowance to the other partner (partner B).

Partner A’s income must be less than their Personal Allowance and partner B must be a basic rate taxpayer.

The personal allowance in the current 2021/22 tax year is £12,570. An eligible couple can transfer 10% of their tax-free allowance to their partner. This works out at £1,260. This means that couples can reduce the tax they pay by up to £252 a year.

The saving is up to £252 because the allowance essentially reduces the personal allowance of partner A to no more £11,310. So the full saving is not received if partner A’s income is between £11,310 and £12,570.

Couples can apply at any time and when they submit their claim HMRC will check to see if a claim could also have been made in any of the 4 previous tax years and receive a tax repayment of up to £1,220.

It is completely free to apply for the Marriage Allowance and you can apply for Marriage allowance using the button below.

Marriage Allowance

Who is eligible for Marriage Allowance?

You can benefit from Marriage Allowance if all the following apply:

  • you are 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 are living together but you are not married or in a civil partnership.

Married couples may have experienced a change in their circumstances which could now mean they are eligible for Marriage Allowance, including:

  • a recent marriage or civil partnership
  • one partner has retired and the other remains working
  • a change in employment due to COVID-19
  • a reduction in working hours which means their earnings fall below their Personal Allowance
  • unpaid leave or a career break, or
  • one partner is studying or in education and not earning above their Personal Allowance

If a spouse or civil partner has passed since 5 April 2017, the surviving person can still claim by contacting the Income Tax helpline – 0300 200 3300.

Marriage Allowance claims are automatically renewed every year. So couples should notify HMRC if their circumstances change such that their eligibility changes.

An example of how Marriage Allowance works

You have an income of £11,500 and your Personal Allowance is £12,570, so you do not pay tax.

Your partner’s income is £20,000 and their Personal Allowance is £12,570, so they pay tax on £7,430 (their ‘taxable income’). This means as a couple you are paying Income Tax on £7,430.

When you claim Marriage Allowance, you transfer £1,260 of your Personal Allowance to your partner. Your Personal Allowance now becomes £11,310 and your partner receives a ‘tax credit’ on £1,260 of their taxable income.

This means you will now pay tax only on £190, but your partner will only pay tax on £6,170. As a couple you benefit, as you are only paying Income Tax on £6,360 rather than £7,430, which saves you £214 in tax.

Marriage Allowance is 10% of an individual’s tax-free Personal Allowance. The maximum amount that can be transferred to their husband, wife, or civil partner is dependent on the Personal Allowance for that tax year.

Marriage Allowance Rates

Tax Year Marriage Allowance Amount
2021 to 2022 £252
2020 to 2021 £250
2019 to 2020 £250
2018 to 2019 £238
2017 to 2018 £230

Our Support

If you should require assistance, understanding or claiming the Marriage Allowance, then please do contact us on 0113 257 4506 or email us at [email protected] and we will be happy to assist you further.