How To Claim Marriage Allowance?

Marriage allowance is a tax scheme that helps couples be more efficient with their earnings.

Everyone wants to make the most of their combined earnings, yet more than 1million UK couples aren’t taking advantage of this scheme.


Who Can Claim Marriage Allowance?

In order to claim marriage allowance you must fit into all of the following criteria:

  • Be married or in a civil partnership.
  • One partner must earn £12,500 (or less) in the 20/21 tax year.
  • The other partner must earn less than £50,000 (£43,430 in Scotland).
  • Both partners must be born after 6th April 1935.

If one partner is earning less than £12,500, then technically they aren’t receiving all of their tax-free allowance.

This means they are then allowed to transfer 10% of their allowance (£1250) to their partner, meaning that their other half will be taxed less, and together – they will take home more of their salary each year.

Essentially:

  • the low earner’s tax-free allowance drops from £12,500 to £11,250.
  • the high earner’s tax-free allowance increases from £12,500 to £13,750.

The marriage allowance scheme is also open to the self-employed, so that no-one misses out. You can apply for marriage allowance through your self-assessment tax return.


What To Do If You Earn Slightly More Or Less Than £12,500

If both of your incomes are floating around the £12,500 mark – then it probably isn’t worth applying for the Marriage Allowance.

In a scenario like this you’re probably worse off, as the tax relief that the higher earner benefits from, can be less than the tax-free allowance the low earner has relinquished.


Can You Backdate A Claim?

When people find out about Marriage Allowance they think back on all of the years that they’ve missed out on…

However, that’s not the case: you can most definitely backdate a marriage allowance claim!

HMRC allow you to backdate 4 tax years for the following amounts:

  • 16/17: £220
  • 17/18: £230
  • 18/19: £238
  • 19/20: £250

Widowers can also make a backdated claim if their partner passed away after 6th April 2015, if they would have been eligible at the time.

In the widowers situation, you’d receive a payout for the whole tax year, even if your partner passed away on the first day of the tax year.


What About Pay That Fluctuates Like Furlough & Bonuses?

Marriage allowance is calculated from your total yearly earnings.

Therefore if your pay on furlough drops you into the eligibility criteria for the end of the 20/21 tax year – then you can make a claim!

If you earn bonuses, that take you over the threshold, then HMRC will adjust you tax code accordingly each year, and seek to recover any underpaid tax in the following year.

If these bonuses are going to be regular, it’s better to inform HMRC and stop claiming Marriage Allowance, so you don’t get any surprise tax bills.

You can wait until you fall back into the criteria and then make a backdated claim the following year.


How To Apply For Marriage Allowance

If you are eligible you can apply for marriage allowance at this link here: https://www.gov.uk/apply-marriage-allowance

It’s important to note that the lower earner must apply, along with their:

  • National Insurance number
  • Their partner’s National Insurance number
  • Proof of ID (Passport/Drivers licence)
  • Bank details if you are in receipt of any other benefits, or a pension.

Successful applications will be backdated to the start of the current financial year.

Marriage allowance will automatically transfer every year, until you inform HMRC that your circumstances have changed and you are no longer eligible.

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