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How to Claim the HMRC Marriage Allowance 2020/21

    I’ve updated this post on 18 April 2020

    The HMRC Marriage Allowance is a tax scheme that allows one partner to transfer up to 10% of their unused personal allowance to another.

    This means that one person can benefit from some additional tax-free earnings.

    It can be particularly useful if you are newly self-employed, are still building up your income or income has taken a dip.

    Who Can Claim the HMRC Marriage Allowance

    To claim the HMRC marriage allowance both you and your partner must meet the following three pieces of criteria:

    1. Be married or in a civil partnership;
    2. One partner does not earn anything or earns below the personal allowance (£12,500 for 2020/21 and 2019/20);
    3. The other partner pays tax at the basic rate of 20%.

    How Does HMRC Marriage Allowance Work

    Here’s an example of how the HMRC marriage allowance works when you are self-employed.

    Mary went self-employed in the tax year 2020/21 and the profits from her business were £5,000 as she was in the start-up phase.  Her partner Jo, was in full-time employment and pays tax at the basic rate of 20%.

    Under the rules of HMRC marriage allowance, Mary can transfer up to 10% of her unused personal allowance to Jo of £1,250 for 2020/21 (£12,500 x 10%). 

    By transferring this Jo’s personal allowance increases to £13,750 (£12,500 + £1,250).

    This equates to a tax saving of £250 at 20%.

    Claiming Backdated HMRC Marriage Allowance

    If you were eligible for the HMRC marriage allowance in 2015/2016 when it was introduced, then you can make a backdated claim for up to four years.

    This means you and your partner could benefit from a tax saving of £967 looking back from the current tax year.

    Tax YearPersonal Allowance10% TransferMaximum Tax Saving
    2020/21£12,500£1,250£250
    2019/20£12,500£1,250£250
    2018/19£11,850£1,185£237
    2017/18£11,500£1,150£230
    2016/17£11,000£1,100£220
    2015/16£10,600£1,060£212

    How to Claim the HMRC Marriage Allowance If You’re Employed

    If you are employed in a job, then you can register online for marriage allowance HERE.  

    Alternatively, you can call HMRC on 0300 200 3300 for help. 

    Your employer will be notified by HMRC to change your partners’ tax code to reflect the transfer of personal allowance.

    It can take a couple of months to take effect, so don’t delay in getting the process underway.

    How to Claim the HMRC Marriage Allowance If You’re Self Employed

    When you are self-employed you need to apply for marriage allowance on your self-assessment tax return form

    You will need to add details of your partner, including their national insurance number.

    Marriage allowance

    If your partner is employed then an adjustment will be made to their tax code by their employer.

    If both you and your partner are self-employed, then the recipient will see a reduction in their self-assessment tax bill when they file their tax return.

    Anita Forrest
    About Anita Forrest

    Anita is a Chartered Accountant with over a decade of working with small business owners. She is the creator of the ‘Go Self Employed’ website, where she simplifies complicated self-employment topics such as taxes, bookkeeping, banking and insurance.