Stock image of a bride and groom

Thursday 11th February 2021

Did you know that if you’re married or in a civil partnership, you, as a couple, could save up to £250 in tax every year through Marriage Allowance?

The Marriage Allowance lets you transfer £1250 of your Personal Allowance to your husband, wife or civil partner.

(‘Personal Allowance’ is what you are allowed to earn before you have to pay any tax.  The allowance for 2020 – 2021 is £12500*)

What does this mean exactly?

Here’s an example:

 Spouse ASpouse BTotal Tax
Without Marriage Allowance
IncomeA£20000£11000 
Personal allowanceB(£12500)(£12500) 
Taxable IncomeA-B£7500£0 
Tax to pay £1500£0£1500
     
With Marriage Allowance
 Spouse ASpouse BTotal Tax
IncomeA£20000£11000 
Personal AllowanceB(£12500)(£12500) 
Marriage Allowance TransferC(£1250)£1250 
New personal allowance (B+C)D£13750`£11250 
Taxable IncomeA-D£6250£250 
Tax to pay £1250£50£1300 (saving £200)

Of course, there are some rules about it.

The following must apply if you want to benefit from it:

  • You must be married or in a civil partnership
  • You do not pay income tax, or your income is below the personal allowance of £12500
  • Your partner pays income tax at the basic rate (i.e., their income is between £12501 and £50000) before they receive marriage allowance

What’s even better about this is, you can backdate it to include any tax year since 5th April 2016 that you were eligible!  Which could be a decent saving for some of you.

If you are living in Scotland, then the rules are a bit different and you can still get this allowance if you are posted overseas.

This is a link to a free tool from HMRC to check how much tax you could save before you decide to apply:

And this the HMRC site with more detail and the application link:

** It is FREE to apply for Marriage Allowance via the HMRC website – you do not need to go through a company who may take a % of any tax savings you may make **

Of course, circumstances do change, so if you want to cancel because your relationship has ended, your income has changed and so you’re no longer eligible or you just don’t want to claim, then you can cancel online:

… or call the Marriage Allowance Enquiries line on 0300 200 3300 (+44 135 535 9022 from overseas)

For more accounting insights, head over to Money Bee or follow me on Facebook @MoneyBeeLizH

*The personal allowance & other tax bands may change slightly in April 2021

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This story comes to you as part of the RAF FF’s themed months over January and February on all things relating to careers and finance. This article is also shared through our quarterly magazine, Envoy (Spring 2021 edition), live from 1 March 2021. You can keep yourself up to date with ongoing information and advice shared by signing up to our (free) weekly eBulletin and Envoy magazine

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