Couples could be overpaying £1,260 in tax, but they can reclaim it in minutes. Lower earners can transfer part of their tax-free allowance to their higher-earning spouse, so the couple can bring home more money collectively.
The Marriage Allowance lets the higher earner take home £252 more per year, and since you can backdate the claim by four years, some couples could receive a lump sum of £1,008 from the Government, in addition to £252 in tax relief in the current tax year. This makes potential savings of £1,260.
If your annual earnings are less than £12,570 – which is the limit you can earn before paying tax – you can transfer 10% of your Personal Allowance to your partner to boost their tax-free earnings.
To receive the full benefit of the scheme, your income needs to be £11,310 or less, so you can transfer the full £1,260 of that unused allowance.
After the transfer, your spouse’s effective allowance increases from £12,570 to £13,830, saving them £252 per year, because they no longer have to pay 20% tax on that £1,260.
However, there are a few caveats. Your spouse must be a basic-rate taxpayer, meaning they earn under £50,270 (or £43,662 in Scotland).
Those who pay higher or additional tax rates cannot claim the allowance. Claimants must also be married or in a civil partnership. Couples who live together are not eligible.
So if your husband or wife earns £6,000 per year through part-time work and you earn £40,000 per year, you are the perfect candidates.
The quickest way to apply for Marriage Allowance is through the Government website. After filling in a form, you will receive a confirmation email within 24 hours.
If you are approved, the higher earner will pay less tax through their paycheck during the 2025-26 tax year. HMRC will adjust both partners’ tax codes. The tax code will end with ‘M’ if you are receiving the allowance, and ‘N’ if you are transferring the allowance.
If you are backdating a claim, you will receive a lump sum by bank transfer or cheque. It can take around a month to receive this.