The deadline to claim your 2016-17 Marriage Tax allowance is 5th April 2021. So you need to act quickly to make sure you don’t miss out.

What is the Marriage Allowance?

This is a tax allowance that’s for couples in a marriage or civil partnership. If one member of the couple doesn’t earn enough money to pay tax, they can transfer £1,250 of their Personal Allowance to the other partner.

This then saves £250.00 on your annual tax bill.

Who can apply for the Marriage Allowance?

You can get Marriage Allowance if you are in a civil partnership or marriage and one of you earns under the Personal Allowance amount while the other pays the basic rate of income tax on their earnings.

It isn’t available for people who are living together, regardless of the length of time you’ve cohabited, or if you have children. It must be a marriage or civil partnership.

At the moment the Personal Allowance is £12,500 and if you don’t earn at least that, then you aren’t paying any income tax at all. The current basic rate of income tax rate is 20% and is payable on annual income between £12,501 and £50,000. This applies to England, Wales and Northern Ireland.

If you’re living in Scotland, it includes people paying their starter, basic or intermediate rates of income tax. This covers annual income between £12,501 and £43,430. The Personal Allowance amount is the same for all four UK nations.

How does it work?

As the partner earning under the Personal Allowance amount, you make the claim.

Here’s an example of the calculation.

  • Your partner’s income is £21,000. Take away their tax free £12,500, their Personal Allowance. You’re paying income tax on £8,500 as a couple.
  • Your Marriage Allowance claim means that £1,250 of your unused Personal Allowance is transferred to them. You get left with a Personal Allowance of £11,250.
  • And your partner gets £1,250 ‘tax credit’, meaning their taxable income is down to £7,500. An income tax saving of £200.

HMRC have put a handy free calculator online, so you can see how much you can save.

How do I apply for Marriage Allowance?

You can apply online and the application doesn’t cost you anything. You need to go through your government gateway account. You’ll need National Insurance Numbers and two forms of identification for both of you. It’s best to get these ready before you start the application, it just makes it easier for you.

If you’re in self assessment, even if you don’t pay tax, then you can apply for the Marriage Allowance through that process.

Excellent news – you can backdate your Marriage Allowance claim for four tax years. That’s why, if you want to apply for the 2016-17 tax year, you need to submit the claim before 5th April 2021.