Married couples and those in civil partnerships may be eligible for a tax break worth up to £252 this year. But there’s no need to use a claims firm which could bank half your cash. Here’s how to do it for free.
The Marriage Allowance enables married people and those in civil partnerships the chance to shift a tax break which reduces the overall tax paid by the earning partner, meaning more cash for the couple.
As long as one half of the couple is a non-taxpayer and the other is a basic rate taxpayer earning between £12,571 and £50,270, then you can apply for the Marriage Allowance.
It centres around the standard Personal Allowance which is currently £12,570 and is the amount of income you can earn without paying tax on.
Here, the lower earner or non-earner elects to transfer 10% of this Personal Allowance to their husband, wife or civil partner – £1,260 rounded up – who must be a basic rate (20%) taxpayer.
By giving up the £1,260 to the partner, it gives them a 20% tax credit on this amount, saving them £252 in this current tax year.
And it can be backdated up to four tax years meaning eligible partners can receive a payment of up to £1,256 by transferring 10% of the Personal Allowance for these tax years:
- £252 in the 2023/24 tax year
- £252 in the 2022/23 tax year
- £252 in the 2021/22 tax year
- £250 in the 2020/21 tax year
- £250 in the 2019/20 tax year
Another point to note is that not only can the Marriage Allowance be backdated, it also applies where a partner has passed away since the start of the 2019/20 tax year.
Don’t pay to save tax
Claims companies are charging couples up to 52% of the tax refund, which includes a 40% fee, 20% VAT and an admin fee of 4%.
Andrew Sanford, partner at tax and advisory firm Blick Rothenberg, said: “Claims companies are making thousands of pounds out of unsuspecting taxpayers when it is just not necessary, and all taxpayers have to do is fill in a form that takes two minutes to complete.
“In one example, I saw a claims company writing to a 93-year-old requesting copy of payslips to see if they were eligible for a refund. This caused anxiety for the person concerned and is clearly wrong.
“There is simply no need to use these companies to claim the allowance. They are charging for a service that is just not required.”
It is completely free to apply for the Marriage Allowance by either:
- Using HMRC’s online service. You will need to set up a Government Gateway account to claim online.
- Completing form MATCF, which is available online, and sending this to HMRC by post.
- Making a claim on your Self-assessment tax return if you are within Self-assessment.
- If your partner has since died, phone the Income Tax helpline on 0300 200 3300.
The person giving up part of their allowance needs to fill in the forms or speak with HMRC. It will result in a change of tax code for both partners.
Marriage Allowance claims are automatically renewed every year. However, couples should notify HMRC if circumstances change.
For more information, see Claims Bible
