Thousands of couples could be missing the opportunity to reduce their tax by £250 a year.
Married couples and people in civil partnerships can sign up for Marriage Allowance, which allows them 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, including those who have been together for many years, can transfer 10 per cent of their tax-free allowance to their partner, which is £1,260 in the 2022 to 2023 tax year. It means 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.
Marriage Allowance is free to apply for, and customers should claim directly via HMRC’s online portal to ensure they receive 100 per cent of the tax relief they are eligible for.
Marriage Allowance is one of a number of benefits and reliefs available to boost family finances at a time when many are concerned with the rising cost of living.
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We want to ensure people are receiving vital financial support at a time when they need it most. Married couples or those in a civil partnership could potentially receive tax relief worth up to £1,242, meaning extra cash in their pockets.”
More than two million couples currently benefit from Marriage Allowance, but there could be thousands more who are eligible to claim.
Even if couples don’t qualify for Marriage Allowance when they first get married, a change in circumstances years later could mean they become newly eligible. These include:
- one partner retiring and the other remaining in work
- a change in employment
- a 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
If a spouse or civil partner has died since 5 April 2018, the surviving person can still claim by contacting the Income Tax helpline.
Marriage Allowance claims are automatically renewed every year. However, couples should notify HMRC if their circumstances change.
If you have any questions on this, or any other tax issue, get in touch.
