Over two million couples missing out on tax break

03 October 2017

Nearly half the couples eligible to claim marriage tax allowance - worth £230 a year - are still failing to do so, HMRC has said.

BBC News has reported that a Freedom of Information request to HMRC by Royal London revealed 2.2m couples are claiming it from the 4.4m which are actually eligible. The figure is up on a quarter last year and HMRC says it has simplified the application process.

The tax allowance can be claimed by married couples or those in a civil partnership if they meet certain conditions:

  • Partners must either be married, or in a civil partnership
  • One partner needs to be earning at least £11,500 a year, and paying tax at the basic rate of 20%. If he or she is earning over £45,000 (£43,000 in Scotland) they are not eligible
  • The other partner must be earning less than £11,500 in 2017-18, meaning they pay no tax
  • If the above conditions are satisfied, the partner not paying tax can transfer 10% of his or her tax allowance to a partner, so saving £230 in this tax year

Back-claims can also be made for previous years.

The latest figures were obtained as the result of a Freedom of Information request to HMRC by insurance company Royal London. Steve Webb, the director of policy at Royal London, said the take-up was "shockingly low" and "When family finances are so tight, I would encourage every married couple to check whether they might be eligible, including for the last two years, as they could qualify for a useful lump sum as well as a reduction in their ongoing tax bill.”

Apply for marriage allowance at GOV.UK