Marriage Tax Allowance Explained

Wondering how to claim the marriage tax allowance? Then keep reading! Here you’ll find out how this income tax allowance works, how to check if you’re eligible to claim a tax rebate and the forms you’ll need, as well as how to claim it if you are self-employed.

1. How Does The UK Marriage Tax Allowance Work

The marriage allowance lets an individual transfer up to £1,260 of unused personal allowance to their partner. This amounts to a tax rebate (or reduction in their tax bill for the year) of up to £252. These rates are correct for the 2021/2022 and 2022/2023 tax years.

Here’s an example of how the marriage allowance works.

Mary decided to become self-employed in the tax year 2022/23 and the profits from her business were £5,000.  Her partner Jo, was in full-time employment and pays tax at the basic rate of 20%. They can benefit from the marriage allowance tax rebate. Mary can transfer up to 10% of her unused personal allowance to Jo for 2022/23 (£12,570 x 10% rounded up).  By transferring this Jo’s personal allowance increases to £13,830 (£12,570 + £1,260).

This equates to a tax rebate of £252 at 20%.

How the Marriage Tax Allowance Works

2. Who Can Apply for the Marriage Allowance Tax Rebate

Every in the UK is entitled to apply for a tax rebate, as long as they meet all the following criteria:

  1. Be married or in a civil partnership;
  2. One partner does not earn anything or earns below the personal allowance (£12,570 for 2022/23 and 2021/22);
  3. The other partner pays tax at the basic rate of 20%.

3. Claiming Backdated Marriage Allowance Tax Rebate

You can backdate your claim for marriage allowance up to 4 tax years, to claim a rebate for any missed tax years. This equates to a potential tax saving of £1,004.

4. Marriage Allowance Rates 2021/23

Tax YearPersonal Allowance10% TransferMaximum Tax Saving
2021/23£12,570£1,260£252
2021/22£12,570£1,260£252
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
The Marriage Allowance Tax Rebate Rates

5. How to Claim the Marriage Allowance Tax Rebate If You’re Employed

If you are employed by someone and receive a payslip, then you can apply online for marriage tax allowance on the .GOV website.  Alternatively, you can apply by phone HMRC on 0300 200 3300 for help. 

Once agreed by HMRC they will send your employer a notification to change your tax codes to reflect the transfer of personal allowance, so they end with:

  • ‘M’ if you are receiving the allowance
  • ‘N’ if you are transferring the allowance

It can take up to a couple of months to take effect, so don’t delay in getting the process underway that way you can benefit from the tax rebate sooner rather than later.

6. How to Claim the Self-Employed Marriage Allowance

If you are self-employed you’ll need to apply for the marriage tax allowance when you fill in your tax return.  You will need to add details of your partner, including their national insurance number.

Marriage allowance
Claiming the Marriage Allowance Tax Rebate on Your Tax Return

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 tax bill when they file their tax return.

7. How to Cancel Marriage Allowance

Once you have applied for the allowance, it will be transferred every tax year moving forward, so you’ll need to make sure you cancel it if your circumstances change. Again you can do that online or by calling HMRC.

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Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

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About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek and money nerd helping financial DIY-ers organise their money so they can hit their goals quicker.