The Complete Marriage Tax Allowance Refund Guide

How To Claim Your Marriage Tax Allowance Refund

The UK government offers MarriageTax Allowance as a means to provide married couples or civil partners with extra financial support. This is different from the Married Couple’s Allowance, which is specifically for couples where at least one partner was born before 6 April 1935.

Eligible couples can claim up to £252 in tax relief for the tax year 2023/24 through the Marriage Allowance, which can be a real help with expenses like food, bills, and household costs. Surprisingly, around 2.4 million qualifying families do not apply for this benefit, missing out on this helpful financial aid. However, with assistance from Claims Advisory Services, the application process is straightforward, and couples can quickly take advantage of this tax break to receive the financial assistance they need.

What is the Marriage Tax Allowance, and Who Can Claim It?

Marriage Tax Allowance allows you to transfer £1,260 of your tax-free personal allowance to your spouse or civil partner if they earn more than you. This is available for married couples or those in a civil partnership with a combined household income of under £62,840.

To apply, you must either be married or in a civil partnership; just living together doesn’t count. One of you must be a non-taxpayer, meaning you either earn under the £12,570 personal allowance or are unemployed. The other partner needs to be a basic 20% rate taxpayer, earning less than £50,270. Higher or additional-rate taxpayers aren’t eligible for this allowance.

How Much Can We Get?

For the tax year 23/24, the amount available is up to £252. You can also backdate your claim by up to four tax years, potentially receiving up to £1,242 in total.  You can use the marriage allowance calculator on the government website to work out how much you could save. 

How Does It Work?

The marriage tax break means that the tax-paying partner pays less tax as part of the other partner’s unused allowance gets transferred over to them. Both partners’ tax codes are adjusted to increase the tax-paying partner’s take-home pay. The lower earning partner can still earn up to £11,310 that year without paying tax. However, if they earn more than £11,310, they will start paying tax.

How Long Does It Take?

This is entirely dependent on HMRC; It could be done relatively quickly, but it also may take time, so your patience is appreciated. The time you notice the difference in your take-home pay will depend on how quickly your employer updates their payroll. If you’re self-employed, HMRC will adjust your self-assessment tax bill accordingly.

Can I Backdate My Claim?

Yes, if you are eligible, you can backdate your claim by up to four years. This means you could be entitled to a significant rebate if you are eligible for the backdated payments. This rebate is available to a huge number of UK couples who may not realise they’re entitled to it and could help make a difference in their finances.

Do I need to complete a refund form to get my marriage tax allowance backdated? 

Unlike the 575T form used for married couples allowance, there isn’t a specific form that you need to fill out to receive a refund for the previous years you were entitled to the marriage tax allowance. When you apply for the marriage tax allowance, you can backdate your claim for up to four previous years and receive any outstanding money you are entitled to in a lump sum.

Be Cautious with Income Limits

If the non-taxpayer in your partnership earns between £11,310 and £12,570, you need to be careful. In this income range, the benefits of the marriage tax allowance might not be as straightforward due to the specifics of tax calculations. In some instances, despite being eligible, you might find that the allowance doesn’t financially benefit you, and could even lead to a net loss.

Therefore, if you’re a non-taxpayer with an income over £11,310, it’s crucial to assess whether the marriage tax allowance will be advantageous for you before applying.

Understanding Your Taxpayer Status

Sometimes, determining if you’re a non-taxpayer isn’t clear-cut. Your personal allowance – the amount you can earn without paying tax – might differ from the standard figures for various reasons, such as having a company car, owing back taxes, or earning interest on savings that pushes you over the threshold. Your tax code letter will provide this information. To understand your tax code and what it could me for you, you can use a  free tax code calculator.

Higher Income and the Marriage Tax Allowance

For those whose taxpaying partner earns just above £50,270, it’s important to understand how the marriage tax allowance works. While it does reduce the amount of tax your spouse or civil partner pays by transferring some of your personal allowance to them, this transfer doesn’t affect the threshold for higher rate tax. Nor does it increase their personal allowance.

This is a crucial distinction, especially for those earning slightly more than £50,270. It means that if your income is just over this limit, you won’t be eligible for the marriage tax allowance, as the transfer of personal allowance won’t bring you into the basic rate tax bracket.

To qualify, the basic rate taxpayer in the relationship must be earning less than £50,270.

Be sure to check out our Claim Services here.