Couples can legally increase their combined tax-free personal allowance to £13,830 and claim tax rebates of up to £1,260 through HMRC's Marriage Allowance scheme, which allows a lower-earning partner to transfer unused allowance to their spouse. This comes as Prime Minister Andy Burnham faces growing pressure to raise the personal tax-free threshold ahead of his first Autumn Budget on October 28.
The personal allowance remains frozen at £12,570, a level set by the previous Conservative government and maintained by the current Labour administration. Rising wages and inflation are pushing more people into higher tax brackets without increasing their real purchasing power, a phenomenon known as fiscal drag. This means the government collects more tax from workers who do not feel wealthier, prompting calls from the Liberal Democrats and Reform to change the threshold.
How Marriage Allowance works
Under the Marriage Allowance scheme, a lower-earning spouse or civil partner can transfer up to £1,260 of their unused personal allowance to their partner, who must be a basic-rate taxpayer. This reduces the receiving partner's income tax bill by 20% of the transferred amount, saving up to £252 each year. Since claims can be backdated, couples can accumulate significant rebates over time.
By transferring the full £1,260, a couple can raise their combined tax-free allowance from £12,570 to approximately £13,830. This is fully approved by HMRC and is available through the official Marriage Allowance Portal or with help from a qualified accountant.
Eligibility criteria and savings
To qualify, couples must be married or in a civil partnership; living together without legal recognition does not count. One partner should earn less than £12,570, ideally under £11,130 for maximum benefit, while the other must be a basic-rate taxpayer earning between £12,570 and £50,270. Eligible couples can save £252 per year, which adds up quickly when backdated claims are made.
The decision on whether to raise the personal allowance rests with Burnham and his Chancellor, John Healey, who will deliver their maiden fiscal statement in just a matter of weeks. No announcement has been made yet on a possible tax-free hike, but the Marriage Allowance remains an immediate, legal way for households to boost their income without waiting for policy changes.
