Tax Claims Marriage Tax Allowance Guide

Everything you need to know about the Marriage Tax Allowance and whether it applies to you

Did you know that if you are married, you may be able to benefit from the Marriage Tax Allowance? This would allow you to transfer some of your personal tax allowance with your spouse to maximise your household income – end result, more money in your pocket!

So, how does this work? Read our handy guide to Marriage Tax Allowance and find out more. And if after reading our handy guide you think you need more information? Call our friendly team on 0115 795 0232 and they will be happy to help.

So down to the basics – what is the Marriage Tax Allowance and how can it help you?

Marriage Tax Allowance allows a couple to transfer some of their personal tax allowances between each other to reduce the overall household tax burden. So if your other half earns less than £11,850, they can transfer some of their tax-free allowance to you so you pay less tax on your earnings.

Anyone who is married or in a civil partnership can claim this tax benefit, as long as one of you is a “basic-rate” tax payer, earning under £46,350 and the other one of you earns less than £11,850 and so doesn’t pay tax.

Still don’t quite understand how it works? Let our handy example below illustrate this for you

Steve and Karen have been married for 10 years. Steve is a full-time builder and earns £36,000 per year. Karen is a part -time hairdresser who earns £6000 per year.

Steve and Karen both have a tax-free allowance of £11,850 – that means that, they don’t pay any tax on the first £11,850 they earn per year. After that, they would pay 20% tax on all earnings up to £46,350. That means that Karen doesn’t pay any tax at all – after all, her earnings don’t meet that £11,500 threshold.

Under the Marriage Tax Allowance, Karen can transfer some of her unused tax allowance to Steve – after all, she doesn’t need any of it! Under these rules, she can transfer 10% of her allowance to Steve – that is £1,185. That means that Steve’s personal allowance is now £13,035 – so he doesn’t need to pay any tax on his earnings below that £13,035 threshold.

And because they have been married for so long, they can backdate this allowance too! HMRC guidelines say that you can backdate your claim to any tax year since 5th April 2015 that you have been eligible to claim Marriage Tax Allowance.

And under the CIS tax rebate scheme, Steve’s annual tax rebate would be based upon his new tax threshold of £13,035 meaning that his rebate could be even higher. Happy days!

So how do you apply for Marriage Tax Allowance?

You need to apply for this via the HMRC – either online using their website or by giving them a call on 0300 200 3300.

To apply there are a few pointers to note to make the process as easy and simple as possible:

  • It needs to be the non-taxpayer who must apply to transfer their allowance to the taxpayer. In our example above, it is Karen who would need to contact HMRC to transfer her allowance to Steve.
  • You will need to provide HMRC with some basic information – both of your National Insurance (NI) numbers, your dates of birth, the date of your marriage and proof of identity (passports, bank account details and so on).

That’s it, all done! Easy and simple, as promised. And DSR Tax Claims can help you claim your maximum tax rebate based on your new personal allowance, meaning even more money coming back to you!

This page was last updated on 24/10/2018.

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