Marriage Allowance 2023 update
Am I eligible to claim the marriage allowance?
There are 1.8 million couples (including civil partnerships) that already claim the marriage allowance, however around 2.4 million qualifying couples are still missing out.
You must be married or in a civil partnership to claim the Marriage Allowance. You cannot claim the allowance if you are only living with your partner. In addition, you need to meet the following criteria:
- You and your spouse were born after 6th April 1935
- You do not pay Income Tax, or your income is below your Personal Allowance (usually £12,570)
- Your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270.
For older couples where one of you was born before 6th April 1935, it may be worth considering applying for Married Couple’s Allowance for a potential tax saving of between £364 and £941.50 for the 2022 to 2023 tax year.
How much can we claim as a couple?
The Marriage Allowance lets the lower earner in a marriage or civil partnership transfer 10% of their personal allowance to their spouse. How much of a tax saving you make depends on the lower earner’s income. For example, if you earn £11,310 and you transfer all of your £1,257 Personal Allowance to your partner, you don’t pay any tax as you are still under the tax-free threshold of £12,570. However, by transferring your personal allowance, your partner gets a ‘tax credit’ of £1,257 on their taxable income. So, if your partner’s income is £20,000, they would normally pay tax on £7,430, however by transferring your personal allowance, they will only pay tax on £6,173 saving you both £251 in tax.
You can use the Marriage Allowance Calculator to work out how much tax you could save as a couple but this tool does not include Personal Savings Allowance or Dividend Allowance. If you receive other income such as dividends, savings or benefits from your job, you should call HMRC’s Income Tax helpline on 0300 200 3300 to help you work out how much you could save.
If you have not yet claimed Marriage Allowance you can benefit from backdating your claim to include any tax year since 5th April 2018 (even if your partner has unfortunately passed away since then). You could save up to £1,240 in tax relief by claiming the maximum allowances as follows:
- 2018/19 - £238
- 2019/20 - £250
- 2020/21 - £250
- 2021/22 - £251
- 2022/23 - £251
Bear in mind that tax allowance rates change every year so in order to claim for the 2018/2019 tax year, the lower earner must have earned under £11,850 and the higher earner must have earned between £11,850 and £46,350 (2018/19 Basic Rate Tax).
It is worth noting that if both incomes are close to the personal allowance, with one just below and one just above, it may not be worth claiming the allowance which could result in a net loss.
When can I claim the marriage allowance?
The lower earner in the marriage or civil partnership (earning below £12,570) can apply at anytime throughout the year and it takes just a few minutes to make the application. Simply have both National Insurance numbers and a form of identification ready and visit gov.uk/apply-marriage-allowance.
With the 6th February announcement from Bank of England’s policymaker Catherine Mann, of an interest rate increase, as well as the continuing pressure of inflation and energy prices, any financial savings that can be made by couples and families should be investigated at the earliest opportunity.
We’re here to help
Applying for the Marriage Allowance yourself is quick and simple and won't cost you anything, however be warned of companies offering their services to help you claim the allowance for a fee (usually a percentage of your allowance).
If you would like advice based on your personal circumstances and income, please speak to a member of LWA’s Personal Tax Team who can help work out if it is worth claiming the Marriage Allowance, and how much you could claim. Our team is available via email to mail@lwaltd.com, or you can call us in Warrington on 01925 830 830 or in Manchester on 0161 905 1801.