Married couples and those in civil partnerships can still claim a valuable HMRC tax break worth up to £1,260, including a backdated £1,000 cheque, following Prime Minister Andy Burnham's confirmation that the £12,570 personal tax-free allowance will remain unchanged for now. The new Labour leader, alongside Chancellor John Healey, has indicated that the threshold, frozen since 2021, is likely to stay at its current level, with no immediate commitment to alter it in the upcoming Budget.
Marriage Tax Allowance: Who Qualifies and How Much You Can Get
The Marriage Tax Allowance allows one partner who is a basic-rate taxpayer to transfer up to £1,260 of their personal allowance to their spouse or civil partner, provided the recipient is a non-taxpayer. This can reduce the couple's tax bill by up to £252 in the current tax year. Crucially, claims can be backdated for up to four previous tax years, potentially yielding a lump sum of around £1,000, paid via cheque or BACS transfer.
According to financial expert Martin Lewis, "With the Marriage Tax Allowance you can back claim four tax years, so you can get this tax year, which is done by altering your tax code, and you can go back four prior tax years, which is about £1,000 benefit, which you get as a cheque, or through BACS, assuming of course that you were eligible for it." Approximately two million eligible couples are missing out on this tax break, which is not available to higher-rate taxpayers.
Andy Burnham's Stance on the £12,570 Threshold
During a visit to Bath, Prime Minister Burnham addressed speculation about changing the personal allowance, stating, "Well, it’s funny these days you can’t answer a question honestly without then people reading everything else into it." He added, "I want to answer questions honestly in this job, as I said before. I think that’s all about trust in politics and doing politics differently, and I’m determined to keep working in that way. It was raised a lot, but I then went on to say, ‘But we’ll have to look at it at the budget alongside everything else’. So no commitment, no unfunded promise."
The £12,570 threshold has been frozen since 2021, dragging more people into income tax as wages rise. Burnham acknowledged that this was "the thing I heard the most on the doorsteps" during the Makerfield by-election campaign. However, reports suggest that any plans to increase the allowance are not part of his initial strategy to address the cost of living crisis, with the BBC indicating that such changes are not imminent.
How to Claim and Impact on Households
To claim the Marriage Tax Allowance, couples can apply online via the GOV.UK website. The process typically takes a few weeks, and if eligible, the tax code of the higher earner is adjusted to reflect the transferred allowance. For many households, this could mean an immediate reduction in monthly tax deductions, as well as a potential backdated windfall.
With the personal allowance frozen, more individuals are paying tax on income that was previously tax-free. The Marriage Tax Allowance offers a practical way for some couples to mitigate this fiscal drag. For example, a basic-rate taxpayer earning £20,000 could transfer £1,260 of their allowance to a non-earning spouse, saving up to £252 a year. Over the four-year backdating period, this totals £1,008, a significant sum for many families.
What This Means for Your Finances
While the government has not committed to raising the personal allowance, the Marriage Tax Allowance remains a valuable tool for eligible couples. It is estimated that around 2.1 million couples could benefit, yet many are unaware of their eligibility. Financial advisors recommend checking your status, especially if you or your partner have a low income or are not working.
The confirmation that the threshold will remain frozen for the foreseeable future underscores the importance of utilising existing tax reliefs. As Burnham and Healey prepare for the Budget, they face pressure to address the fiscal burden on lower-income households. In the meantime, claiming the Marriage Tax Allowance is a straightforward step that can provide immediate and retrospective financial relief.
