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Tax & Legislation

Helpful information

Marriage Allowance

The Marriage Allowance has been created to provide married couples with a small amount of tax relief.

What this means is that the Marriage Allowance enables a person to transfer £1,190 of their Personal Allowance to their partner if they earn more. This enables their combined tax bill to be reduced by approximately £240 over the total tax year. To qualify for this as a couple, the person as the lowest earner must have an income lower than their Personal Allowance – approximately £11,850. Furthermore, the Marriage Allowance can be backdated, meaning you can make a claim for any tax year you were eligible from 2015 onwards. The Marriage Allowance is a legal allowance provided by the government to help reduce the amount of tax a married couple must pay each tax year. Whilst it does involve some time and the filling out of forms, the benefits of doing so are very real and can help provide couples and families with some much-needed financial relief. We have put together the following information to help you better understand what the Marriage Allowance is, what is involved, how it affects your tax and National Insurance payments and how to make a claim.

Marriage Allowance eligibility

To be able to claim Marriage Allowance you need to meet certain criteria laid out by the government. Firstly, you will, of course, need to be married or in a civil partnership and have the relevant documentation to prove this. Other requirements include:

  • Your annual income is lower than your Personal Allowance – this currently stands at £11,850
  • Your legal partner has an annual income of between £11,850- £46,350 – meaning they pay the basic rate of Income Tax
  • If you or your partner are currently receiving a pension, you can still apply for Marriage Allowance. Other factors that will not affect your Marriage Allowance application include those living overseas – as long as they are still eligible for a Personal Allowance.

Marriage Allowance Application

It is worth noting that applicants cannot receive Marriage Allowance and Married Couple’s Allowance at the same time – so you will to consider this when deciding to apply. The Marriage Allowance application form can be completed and submitted online. It is recommended that of the couple, the person with the lowest income make the application. If your application is successful, any subsequent change to your Personal Allowance will be backdated to the beginning of that tax year. If your application for Marriage Allowance is successful you will receive the allowance in one of two ways – either your tax code will be changed accordingly (this can take as long as 2-months) or when you receive your Self-Assessment tax return from HMRC. If you are employed or have a pension, your tax code will be changed to reflect the fact you are now receiving this – thus also changing your Personal Allowance. It should be noted that if your new Personal Allowance is now less than your stated income, you may be liable for Income Tax.

When your circumstances change

As long as your original circumstances remain the same, the Marriage Allowance will be automatically transferred to you until it is either cancelled by you or your personal circumstances change. If you wish to cancel your Marriage Allowance, you can do this online by providing personal identifying information requested by HMRC. Other changes that will affect your Marriage Allowance include getting divorced or dissolving a civil partnership. One of the most common reasons for a person’s circumstances changing is when their income rises or falls. If your income does change, you must inform HMRC as soon as you can to avoid any problems later on. HMRC will then inform you as to whether you still qualify, or you need to cancel it. There are also strict guidelines surrounding what happens to the Marriage Allowance when a person claiming it dies. Whilst it is still possible to claim Marriage Allowance following a death, the exact details depend largely on personal circumstance and you are therefore advised to contact HMRC directly should you find yourself in this situation.

As with anything of this nature, you are always advised to be as clear and transparent as possible when supplying information to HMRC. You should not be afraid of informing HMRC of any changes as failure to do so may lead to financial penalties. If you are worried that you will lose your Marriage Allowance due to changes in your circumstances, you are recommended to contact HMRC who will be able to advise you on the best route to take.

What to do next

If you wish to apply for Marriage Allowance, you can do so easily and quickly. Requiring personal information to confirm your identity, you can now apply for and get a decision completely online – even from your smartphone. Once approved, you will receive the tax break every year until your personal circumstances change. This is a legitimate benefit provided to married couples and therefore, as long as you think you will meet the required criteria, you are advised to apply.

Good Luck!

As with all such allowances and tax breaks, you will have to do most of the initial leg work yourself. Whilst this may seem slightly daunting, you should not be put off. Often requiring only a little time and some basic documentation, such allowances are designed to help people make the most of their money – particularly low earners, those with families and married couples. Applying for such an allowance will cost you nothing and you will of course not be penalised if your application is denied. HMRC ensures it does everything it can to give applicants a decision as quickly as possible, and you could, therefore, find yourself benefitting from the allowance very quickly.

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