The Marriage Allowance - Are you Eligible?

Are you eligible for the Marriage Allowance claim? If you’re married and not making the most of the tax efficiency of this scheme then it’s certainly something to consider.

So what is the Marriage Allowance? It’s a great opportunity, and one not to be missed - letting you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner if they earn more than you - reducing their tax by up to £252 in the tax year.

If you’re a higher income earner, you may be able to claim more than £1000 for the previous 4 years.

But how do you know if you’re eligible? Let’s take a look at the rules.

Are you eligible for the marriage allowance claim?

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

• You’re married or in a civil partnership.
• You don’t pay Income Tax, or your income is below your Personal Allowance. (usually £12,570)
• Your partner or spouse pays Income Tax at the basic rate.

If you’re cohabiting but not married, you won’t be eligible to claim for the marriage allowance. However, you are still eligible if you or your partner are currently receiving a pension, or live abroad.

Once you’ve applied and it’s been confirmed you’re eligible, you won’t need to reapply in following years - the personal allowance will transfer automatically until your circumstances change in a way that makes you no longer eligible - for example if you divorce, or your partner or spouse dies.

The allowance would also be cancelled should you move into an income tax threshold that requires you to pay tax.

Backdating your claim

Another thing many people don’t realise is that it’s possible to backdate your Marriage Allowance claim.

The claim can be successfully backdated to include any tax year since 5th April 2019 that you were eligible for Marriage Allowance. Your partner’s tax bill will be reduced according to the Personal Allowance rate that was in place in the years you’re claiming for.

If your partner is deceased, and has died since 5th April 2019 you can still claim. To do this, you’ll need to call the Income Tax helpline. However, if your partner was the lower earner in your partnership, the person responsible for managing their tax affairs would need to phone.

If you’re putting in a backdated claim you will receive a payout for this, via a cheque or bank transfer, and usually within two weeks if you apply online.

How do I apply?

You can apply online through the appropriate page on the HMRC site. It’s a very simple process, and as long as you have the documentation to hand it shouldn’t take long.

You’ll need both your National Insurance (NI) numbers and something that proves your identity - like a P60, a payslips less than three months old, or your passport.

You can also apply through HMRC’s self-assessment portal if you’re registered as self-employed and fill out tax returns.

If you’d like expert advice on this or any other matters relating to tax then please do get in touch with us at dns accountants for a free consultation!

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.