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Marriage Tax Allowance 

If you are married or in a civil partnership you could be entitled to £1100 of your spouse's unused personal allowance. It is estimated that of the 4.1 million currently entitled 3.5 million are still yet to claim their marriage allowance tax-relief. It's relatively straight-forward process and will save you £220 per year so, why not?

Who is eligible?

In April 2015 the government introduced Marriage Tax Allowance to allow couples to transfer a portion of their unused personal allowance (your tax-free income - currently £11,000) to their spouse. This in an effort to promote the 'nuclear family' concept and strengthen the institution of marriage. For those looking to apply please see the criteria below:

Both are born after 06/04/1935

One person is a none tax payer (earns under £11,000 per year) and the other is a basic rate tax payer (earns between £11,000 - £43,000)

You are in a Civil Partnership or Married (living with your partner won't count)

How it works

The mechanics of how Marriage Tax Allowance works are quite simple. The none taxpayer can transfer £1100 of their personal allowance over to their spouse (please note it must be the none taxpayer who applies to do this). This in-turn increases their spouse's tax-free allowance to £12,100 and decreases their own to £9,900. We created two examples below to show you how this might work:

Example 1

"Wife (Emily) earns £20,000 per year as receptionist. Husband (Thomas) works part-time as barman earning £6,500 per year. Thomas informs HMRC and transfers £1,100 of his remaining allowance to Emily. 

Emily now has £1,100 extra on her tax-free allocation and pays £220 less tax (Due to 20% basic tax rate) whilst Thomas is still paying £0."



Example 2

"Husband (George) earns £33,000 per year as an IT Technician. Wife (Lucy) earns £10,300 as a lunch lady at her local school. Lucy contacts HMRC and transfer £1,100 as she is still under the threshold. 

George, with his extra £1,100 on his tax-free allocation, pays £220 less tax. Lucy's new personal allowance is now £9,900 and she now earns a taxable amount and will be taxed at 20% for the £400 she is above her limit. Lucy would now pay £80 tax per year, leaving them £140 better off."


A key point to remember are that the transferable amount is always £1,100 no matter how much the none tax-payer earns. 

There are some differences in how the Marriage Tax Allowance works for self-assessment earners compared with people who are PAYE registered. If you are PAYE registered, at the time of your application being approved, you will be issued a new tax code with your increased allowance and your tax will be deducted at its new rate from then on. If you are registered to submit a self assessment your increased personal allowance will be taken into account when you submit your annual return. You can make a backdated claim of up to four years (please note this scheme was only introduced in April 2015) so for those that have yet to register but would have been eligible, speak to your accountants or contact HMRC directly.

Next Steps 

Applying for Marriage Tax Allowance is a very straightforward process and can be done via this link. All you will need is both of your National Insurance numbers and a proof of identity for the non-tax paying spouse. Again, remember that it is the non-tax payer that has to apply for this scheme. After completing the form you will be informed immediately as to whether your application has been successful via email. If you prefer to deal with this over the phone you can call HMRC on 0300 200 3300 and an agent will be able to assist you. 

For any Stone Accountants clients that haven't yet been contacted but believe they may be eligible please call the offices on 01785 748 740 or email and we will apply on your behalf. 


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