UK married couples and civil partners could be missing out on a backdated tax perk worth up to £1,008 from HMRC. The Marriage Allowance allows one partner to transfer £1,260 of their Personal Allowance to the other, reducing their tax bill by up to £252 per tax year. Claims can be backdated to April 6, 2022, meaning eligible couples could receive a lump sum of up to £1,008.
How Marriage Allowance Works
Your Personal Allowance is the amount you can earn before paying tax. For the 2024/25 tax year, the standard Personal Allowance is £12,570. Marriage Allowance lets you transfer £1,260 of your allowance to your spouse or civil partner, provided the transferring partner earns less than the Personal Allowance threshold. The recipient then pays tax on £1,260 less income, saving up to £252 per year (based on the 20% basic tax rate).
Backdating and Eligibility
Claims can be backdated to April 6, 2022, covering up to four tax years (2022/23, 2023/24, 2024/25, and 2025/26). This means eligible couples could receive a total of up to £1,008. According to personal finance experts, this allowance is often missed because nothing dramatic happens when you become eligible. A partner may reduce their hours, retire, take time out for caring, or have a lower-income year, and the couple never think to revisit their tax position.
Official Guidance and Example
The Labour Party government illustrates the perk with an example: 'Your income is £11,500 and your Personal Allowance is £12,570, so you do not pay tax. Your partner’s income is £20,000 and their Personal Allowance is £12,570, so they pay tax on £7,430. This means as a couple you are paying Income Tax on £7,430. When you claim Marriage Allowance you transfer £1,260 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,310 and your partner gets a reduction of £1,260 on their taxable income. This means you will now pay tax on £190, but your partner will only pay tax on £6,170. As a couple you benefit, as you are only paying Income Tax on £6,360 rather than £7,430, which saves you £214 in tax.'
How to Claim
Experts warn that people do not need to pay a refund company to check this. Instead, use the official GOV.UK Marriage Allowance service. Make sure you meet the rules for every year you are claiming, and set a yearly reminder to review any tax breaks or benefit entitlements that may have changed with your income.
