How To Apply For Marriage Allowance

Read on to find out about marriage allowance. What exactly it is. How it works and whether you could be eligible to claim.

What Is Marriage Allowance?

Marriage allowance is essentially, a tax perk. It’s available to married couples, where the person with the lowest income can transfer up to £1,260 of their personal allowance to their partner.

The other person will then receive a tax credit equivalent to the amount of allowance that has been transferred to them from their partner.

This is then deducted from the amount of tax they would usually have to pay, reducing their overall tax.

Tax is only introduced when a person starts earning over £11,310 a year. If you are earning less than this, you won’t be paying any tax.

Am I Eligible?

Each person has a set personal allowance, or threshold of income before tax is introduced. If your income is under this threshold – which in 2021-22 is £11,310 – you could be eligible.

However, your partner’s salary must also fall between a certain range – £12,571 and £50,270 to be considered eligible. (In Scotland this is different so check your area).

How Does Marriage Allowance Work?

To apply for the marriage allowance, the lowest earner must apply to HMRC to request their allowance to be transferred to their spouse.

Whether you earned £5,000 a year, or £11,000 a year, the maximum amount of allowance you can request is £1,260. You also can’t opt to transfer part of your allowance. It’s either all or nothing.

However, in 2021-22, those earning above the threshold – £11,310, but below £12,570 can still transfer up to £1,260 of their allowance. However, as you are now over the tax threshold, you will have to pay tax on any income over the £11,310.

For example, if you get paid £11,800, you will be taxed on the £490 income over the tax threshold (£11,800 minus £11,310 = £490). Your partner will still make a saving by applying for a marriage allowance. It will just be slightly reduced due to the tax they will have to pay on the

Once you have this set up, this allowance will transfer to your partner automatically each year unless you contact HMRC to cancel it.

Who Can Qualify For This Allowance?

Other than your income status, there are a few other criteria you will need to meet to be eligible…

• Be married or in a civil partnership.
• Born after 5th April 1935.

FAQ’s

Here are some frequently asked questions when it comes to marriage allowance…

• Can marriage allowance be backdated? – Yes, you can claim for up to 4 years back.

• Will the marriage allowance change my tax code? – Yes. The person who gets the extra tax allowance from their partner, their code will change to ‘M’. This is to show they’re receiving marriage allowance.

• Is marriage allowance taxable? – No, marriage allowance is tax free. You are essentially giving your partner your un-used tax allowance.

• How do i get paid? – The person receiving the additional tax relief will be taxed on a smaller proportion of their salary. The extra money will be received in their usual pay. However, if you’ve applied for a backdated allowance you’ll be sent by cheque.

• How do I cancel my transferred allowance? – You can do this online or by calling 0300 200 3300.

• Can self-employed people claim the marriage allowance? – Yes, self employed people are eligible, as long as you both fit the criteria.
  
• Can you claim marriage allowance while on maternity leave? – Yes, as long as your income falls below the threshold, you can apply for a transfer of allowance.

• Can higher rate taxpayers get marriage allowance? – No. This allowance is only for taxpayers within the £12,571 – £50,270 bracket.

Hopefully this article has been useful to you and explains a little more on the facts behind marriage allowance. It’s a bit of a pain to set up but it’s so worth it if one of you are paying under the income threshold.

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