What is the marriage allowance?

If you haven’t heard of the marriage allowance, you could be one of the estimated 2.1 million couples missing out on an important tax break. In this article, you’ll learn what the marriage allowance is, how it works and whether you’re eligible to make a claim. 

The marriage allowance is a tax break that’s available to some married couples and civil partners. It allows a non-taxpayer to transfer 10% of their personal allowance (the amount you earn without paying tax) to their spouse.

To be eligible, the higher-earning spouse must be a basic rate (20%) taxpayer. The marriage allowance increases the higher-earning spouse’s personal allowance by £1,260 in the 2023/24 tax year.

You may qualify for the marriage tax allowance if you meet the following criteria: 

• You’re married or in a civil partnership
• You were born after 5 April 1935 (a different tax break is available to people born before this date)
• You do not pay income tax or you earn less than the personal allowance (£12,570 in 2023/24)
• Your spouse or civil partner is a basic rate taxpayer – their income will need to be between £12,571 and £50,270 (£43,662 in Scotland) in 2023/24.

If you’re not sure whether you’re eligible, you can call the marriage allowance helpline on 0300 200 3300.

Once your application has been approved, HMRC will transfer 10% of your personal allowance to your spouse or civil partner. As the personal allowance is £12,570, you can transfer £1,260 in 2023/24. 

If your partner is employed, HMRC will adjust their tax code so they pay less tax on their salary. As shown in the example, this could reduce their tax bill by up to £252 every tax year. 

Example

David is a part-time window cleaner and earns £6,000 a year. His income is well below the £12,570 personal allowance, so he doesn’t pay tax.

David’s wife, Sally, is a full-time teacher and has a salary of £30,000. That’s above the personal allowance but below the £50,270 higher rate tax threshold, meaning Sally pays the 20% basic rate of income tax.

As David has plenty of personal allowance remaining, he can transfer £1,260 (10% of £12,570) to Sally. 

This increases her personal allowance to £13,830. Consequently, Sally is taxed on £16,170 (£30,000 minus £13,830) rather than £17,430. This means that Sally can now earn an extra £1,260 of her salary tax-free, therefore Sally and David are £252 better off (20% of £1,260). 

The marriage tax allowance is worth a maximum of £252 in the 2023/24 tax year. However, you may be able to receive more than this as you can backdate claims by up to four years. 

The maximum savings available in the previous four tax years are:

• 2022/23 – £252
• 2021/22 – £252
• 2020/21 – £250
• 2019/20 – £250

When added to the current year’s tax saving, this means you could be eligible to receive up to £1,256, assuming you were eligible for the marriage allowance in all four previous tax years. If you want to claim the marriage allowance for the 2019/20 tax year, make sure you apply for a refund before 5 April 2024.

While the majority of couples will benefit from the marriage allowance, there are some scenarios when claiming the tax break may leave you worse off. 

This could be the case where a non-taxpayer earns just below the personal allowance and the higher-earning spouse earns just over it. If the lower earner is close to using all of their personal allowance, it’s worth checking how much you will stand to gain or lose before you apply.

You can apply for the marriage tax allowance via the gov.uk website. It’s important to note that the non-taxpayer (not the higher earner) will need to submit the application. To do this, you’ll need both of your national insurance numbers to hand, as well as two other forms of identification for the non-taxpayer. Once you’ve submitted your application, you should receive a confirmation email from HMRC within 24 hours.

If you can’t apply online, you can call HMRC on 0300 200 3300 or post your application, although it will usually take longer to process.

When you receive the money depends on whether you’re claiming for the current tax year or previous years. If you’re claiming for the current tax year, you won’t receive a payment. Instead, HMRC will change the higher earner’s tax code so they pay tax on a smaller portion of their income. If they’re self-employed, the tax break will be applied when they complete their self-assessment tax return.

If you’re claiming for previous years, you’ll receive a lump sum payment, either via bank transfer or a cheque. 

Once you’ve claimed the marriage tax allowance, you won’t need to reapply every year. The non-taxpayer’s personal allowance will be automatically transferred to the higher-earning spouse. 

This means the onus is on you to inform HMRC if your circumstances change and you’re no longer eligible for the tax break. 

You should cancel the marriage allowance if:

• You and your spouse get divorced or you dissolve your civil partnership 
• You’re no longer eligible because your income has increased, for example, the non-taxpayer starts earning more than the personal allowance or the basic rate taxpayer is pushed into the higher rate tax bracket
• You no longer want to receive the tax benefit.

In these circumstances, you can cancel your marriage allowance online or call the marriage allowance enquiries helpline for assistance.