MARRIED ALLOWANCE UK: The policy lets some couples share a slice of their annual income tax allowance.
UK government claim more than 2 million entitled couples are still slow at registering for the married persons tax allowance.
That is despite a potential marriage tax break for some worth over £600.
The system allows you to reduce the tax bill of your husband, wife, or civil partner. That is providing you were both born on or after 6th of April 1935.
So, who qualifies for Marriage Allowance 2022/23 and how do you get it?
Eligibility depends on some specific personal circumstances. This guide explains how married couples, and those in a civil partnership, can apply.
Note: The Marriage Allowance rules, and how to apply, is also available in Welsh language ‘Lwfans Priodasol‘ (Cymraeg).
Marriage Allowance: How Does it Work?
Registering for the Marriage Allowance means you can transfer £1,260 of your Personal Allowance. You can share it with your spouse or civil partner providing they are earning more than you.
That would reduce their tax bill by an amount up to £252 for the current tax year (6th of April to 5th of April the next year).
But, this tax break is only for couples whereby the lower earner has an income not more than £12,570. In fact, that means the low earner would be a non-taxpayer.
Note: In some cases you can backdate your claim to include any or all tax years since the 5th of April 2015. That could mean a couples tax allowance incentive around £662 in some cases.
Who Can Claim Marriage Tax Allowance?
There are specific rules to meet the Marriage Allowance eligibility criteria. You will qualify if all these apply to your circumstances:
- You are a married couple or you live in a civil partnership.
- The lowest earner has no income at all or their annual income is not over £12,570.
- The highest earner has an income from £12,501 but not more than £50,270 (£43,662 in Scotland).
The online Marriage Allowance registration rules allow you to apply even if you or your civil partner:
- Live outside the United Kingdom providing you qualify for a Personal Allowance.
- Currently receive a pension.
Note: The benefits may be different if you or your partner were born before the 6th of April 1935. In this case couples may benefit more by applying for the Married Couple’s Allowance instead. Work out your shared taxes using the government Marriage Allowance benefits calculator online.
Marriage Tax Allowance: How to Apply
Registration is simple because you can apply for the Marriage Tax Allowance online. Successful applicants will get changes to their Personal Allowances backdated by automatic process. The backdate goes back to the start of the relevant tax year (6th of April).
Note: Marriage Allowance rules allow a claim even if your partner has died since 5th of April 2015. The person managing the tax affairs should phone to claim if the partner was the lower earner.
Income Tax Helpline
Telephone: 0300 200 3300
Textphone: 0300 200 3319
Outside UK: +44 135 535 9022
Check the cost of calling UK numbers.
How HMRC Change Personal Allowances
HM Revenue and Customs have several ways of giving the extra allowance to your partner. They will either:
- Alter the married allowance tax code (note this method can take up to two (2) months to complete).
- Make the changes when they receive the Self Assessment tax return (for self-employed workers).
Employed workers and those who get a pension will also see a change to their tax codes. The new code reflects your new Personal Allowance and it will end with the letter ‘N’.
When Marriage Tax Allowance Stops
Personal Allowance transfers by automatic process each year. Even so, it will stop if one of you decides to cancel Marriage Allowance transfer or your circumstances change. Typical reasons for cancellation would be for a divorce or because of a death.
How to Cancel Marriage Allowance Transfer
Either one of the partners can cancel Marriage Allowance online. The GOV.UK website explains how to stop the allowance if your circumstances change. HMRC will need you to prove your identity using information they store about you.
The actual date that the tax allowance ends will depend on which partner cancels it. It will run to the end of the financial tax year (April 5th) if the transfer of tax allowance to a spouse stops.
In some cases your partner may ask to stop getting your allowance. HMRC would backdate the status change to the start of the tax year that you started transferring it.
Divorce or Dissolution of Civil Partnership
You can also cancel the allowance if you get divorced or your civil partnership ends. You have a choice if you are transferring the share to your partner:
- You can continue transferring the married persons allowance up to the end of the tax year.
- You can backdate the change to the beginning of that tax year.
It will run to the end of the financial tax year (April 5th) if you ask to stop transferring your partner’s quota.
Changes to Income
If there are changes to your income you should contact HM Revenue and Customs. HMRC will inform you whether:
- You will still benefit as a couple if you continue to claim Marriage Tax Allowance.
- You will need to cancel the allocation altogether.
Death of a Partner
Several changes occur if a partner dies following the transference of Personal Allowance to them. In this case:
- The increased Personal Allowance will go to their estate.
- Your Personal Allowance will return to the standard amount for Income Tax purposes.