The Marriage Allowance is a valuable tax break that can help couples save money by transferring a portion of the Personal Allowance from one spouse or civil partner to the other. However, many eligible couples miss out on this benefit simply because they don’t understand how it works or how to claim it. In this comprehensive guide, we’ll walk you through everything you need to know about claiming the Marriage Allowance on your UK tax return, including who is eligible, how to make a claim, and common pitfalls to avoid.
What Is the Marriage Allowance?
The Marriage Allowance allows a spouse or civil partner who earns less than the Personal Allowance (£12,570 for 2024/25) to transfer up to 10% of that allowance (£1,260) to their higher-earning partner. This reduces the recipient’s tax bill by up to £252 for the tax year. It’s a simple way for couples to make the most of their combined allowances, provided they meet the eligibility criteria.
Who Is Eligible for Marriage Allowance?
To qualify for Marriage Allowance, you must meet the following conditions:
- You must be married or in a civil partnership—unmarried couples, even if living together, are not eligible.
- One partner must have an income below the Personal Allowance (£12,570 for 2024/25).
- The other partner must be a basic rate taxpayer (earning between £12,571 and £50,270 for 2024/25). Higher or additional rate taxpayers cannot receive the transferred allowance.
Both partners must be born on or after 6 April 1935. Those born before that date may qualify for the Married Couple’s Allowance instead, which works differently.
How Does Marriage Allowance Work?
When you apply for Marriage Allowance, the transferring spouse reduces their Personal Allowance by £1,260. The receiving spouse’s tax bill is reduced by 20% of that amount (£252 for 2024/25). HMRC adjusts the recipient’s tax code to reflect the additional allowance, which reduces the tax deducted from their income through PAYE. If the recipient is self-employed or files a Self-Assessment tax return, the allowance is applied as a tax reduction when the return is processed.
How to Claim Marriage Allowance
You can claim Marriage Allowance in two main ways:
- Online through HMRC’s website: The transferring spouse applies using their Government Gateway account. The process is straightforward and takes only a few minutes.
- Through a Self-Assessment tax return: If you already file a tax return, you can make the claim by completing the Marriage Allowance section on your return (usually under “Transfer of Allowances”).
It’s important to note that only the partner with the lower income can make the claim. Once the claim is approved, HMRC will adjust both partners’ tax codes to reflect the transfer for future tax years. You can backdate a claim by up to four tax years, which can generate a significant refund if you’ve been eligible but didn’t claim previously.
Claiming Marriage Allowance on Your Tax Return
If you’re the lower-earning partner filing a Self-Assessment tax return, you can claim Marriage Allowance by completing the “Transfer of Allowances” section. You’ll need to provide your spouse’s details, including their National Insurance number. Once HMRC processes your return, they will adjust your partner’s tax liability to reflect the transfer.
If you’re the receiving partner filing a tax return, the tax reduction will be applied automatically once the claim is processed. Check your SA302 tax calculation or your HMRC account to ensure the adjustment has been applied correctly.
Backdating a Marriage Allowance Claim
You can backdate a Marriage Allowance claim by up to four tax years. This means you can potentially receive refunds for previous years you were eligible but did not claim. To do this:
- Apply online via HMRC’s website, selecting the relevant tax years you wish to backdate.
- Alternatively, include the backdated claim in your Self-Assessment return, specifying the years and providing your spouse’s details.
Backdating can result in a refund of up to £1,000 if claimed for all four years, so it’s worth reviewing your tax situation carefully.
Common Mistakes to Avoid
While Marriage Allowance is straightforward in principle, several common mistakes can delay or reduce your tax benefits:
- Applying as the wrong partner: Only the lower-earning partner can make the claim.
- Not updating your circumstances: If your income changes or you separate, you need to inform HMRC to prevent over- or underpayments.
- Claiming while one partner is a higher-rate taxpayer: Higher or additional rate taxpayers are not eligible to receive the allowance.
- Missing the backdating opportunity: Many couples forget to backdate their claim, missing out on potential refunds.
Double-check your eligibility and details before making a claim to avoid these pitfalls.
Benefits of Marriage Allowance
Marriage Allowance provides a simple way for eligible couples to reduce their overall tax liability. Benefits include:
- Up to £252 tax reduction each year (for 2024/25).
- The ability to backdate claims for up to four years.
- Straightforward application online or via Self-Assessment.
- Automatic adjustment of tax codes for PAYE taxpayers.
These benefits make it an attractive option for many couples looking to maximise their household finances.
When to Seek Professional Help
While many couples can handle the claim themselves, some situations may benefit from professional advice, such as:
- Complex income structures, such as dividends, rental income, or overseas earnings.
- Recent marriage or civil partnership affecting multiple tax years.
- Changes in income thresholds that might affect eligibility mid-year.
- Previous claims with errors or disputes with HMRC.
A qualified tax professional can help ensure your claim is correct and complete, maximising your benefit and avoiding future issues.
Conclusion
The Marriage Allowance is a valuable but often overlooked tax relief that can help couples save money each year. By understanding the eligibility criteria, how to claim, and how to include it in your tax return, you can ensure you receive the full benefit. Keep accurate records, review your circumstances annually, and consider backdating claims to maximise your tax savings. With a bit of planning and attention to detail, Marriage Allowance can be a simple and effective way to boost your household finances.
