TAX BASICS

How to Apply for Marriage Allowance in the UK?

There are various tax allowances in the U.K to save tax. The UK government’s marriage allowance is one such saving option for married couples or for those in a civil partnership. We will take a look at who can apply and how to apply for a marriage allowance.

What is the Marriage Allowance?

As mentioned earlier, it is a tax-saving option for the married couples or for those in a civil partnership. If one pays the basic level of income tax and the other is exempt from paying tax. This allows you to transfer £1,250 of your personal allowance to your other non-tax paying partner. Therefore, the higher-earning partner will receive a tax credit equal to the amount that has been transferred. This allows you to save tax, but normally one person must have income below the personal allowance of £12,500 to benefit from the scheme.

How does Marriage Allowance Work?

The marriage allowance allows one of the partners to transfer up to £1,250 to the other person. However, individuals might have to pay a higher sum individually, but they will end up paying less as a couple. To enrol in the scheme, you need to register with the HMRC or through Self-Assessment. Once registered with the HMRC, the amount is then transferred each year to the partner’s account until you cancel.

What is the Eligibility?

To be eligible to apply for the marriage allowance, you need to meet the following criteria.

  • You must be married or should be in a civil relationship.
  • Should be born after 5 April 1935. Anyone born on this date or before then would be entitled to the married couple’s allowance instead.
  • One of the partners must be earning below the personal allowance, and the other must be paying the basic tax rate.

How to apply for the UK governement’s marriage allowance?

Before you apply, you also need to have your and your partners National Insurance number. You also need to prove your identity using any 2 of the following.

  • your P60
  • your U.K. passport details
  • using information held on your credit files like credit cards and mortgages
  • one of your three most recent payslips
  • details from your self-assessment tax return from any of the previous three years
  • your Northern Ireland driving Licence

The easiest way to apply for Marriage allowance is online through the HMRC’s website. If you are unable to apply, you can claim the allowance through self-assessment

Will there be a change in the tax code?

Yes, the HMRC will give the allowance transferred to them by changing the tax code. For the partner who is receiving the allowance, their tax code will end with M. The partner who is transferring the allowance their new tax code will end with N.

How to cancel the Marriage Allowance?

If your relationship ends or your income is now higher, and you are not eligible for the allowance, then you must cancel. If you are cancelling because your relationship has ended, any one of the two can go ahead and cancel. Whereas, if it’s for any other reason, then it should be done by the person who made a claim. You can cancel the allowance online through HMRC. You can also call the enquiries team at 0300 200 3300.

Sidharth Bharthan Menon
CEO, taxtotal​