Martin Lewis, the well-known personal finance expert, has issued a timely reminder for married couples and civil partners to take advantage of a tax benefit that could be worth up to £1,260.
This Marriage Tax Allowance applies if one partner earns below the tax-free threshold and allows them to transfer a portion of their allowance to the other partner. Couples who have not claimed before can receive a lump sum of up to £1,258, covering the past four tax years in addition to the current one.
According to Lewis, an estimated 2.1 million eligible couples have yet to claim this benefit. Many may not be aware that they can still apply even if the lower-earning partner has only worked part of the year. Given the rising cost of living, this financial relief could be significant for many households.
How the Marriage Tax Allowance Works
The Marriage Tax Allowance allows a lower-income partner to transfer 10% of their unused personal allowance to their spouse, reducing their tax burden. In 2024/25, the standard personal allowance is £12,570. This means:
- The non-taxpayer (earning below £12,570) can transfer £1,260 of their allowance.
- The recipient, if paying the basic 20% tax rate, will see a reduction of £252 in their tax bill each year.
- If the allowance is backdated for four years, the total potential refund is £1,258.
To qualify, one partner must earn below £12,570, and the other must be a basic-rate taxpayer (earning up to £50,270 in England, Wales, and Northern Ireland, or £43,662 in Scotland).
Martin Lewis also emphasised that this tax break is available to couples where at least one partner was born after 5 April 1935. Those born before this date may be eligible for a different tax benefit, known as the Married Couple’s Allowance.
Urgency Due to Tax Year Deadlines
The deadline for backdating claims is 5 April 2025, the end of the current tax year. If a couple has never applied, they can claim for the previous four years plus the current one.
However, Martin Lewis recommends acting by 1 March to ensure enough time for the claim to be processed before the tax year ends.
He explained:
“There are 2.1 million eligible couples who are not claiming this, who should be claiming this and could gain. So do it on 1 March, or if you’re the type of person who thinks, ‘If I don’t do it now, I’ll never do it’, you can go onto Gov.uk, download a form online, and post it in.”
Lewis also noted that the Gov.uk website for making applications is currently down for two weeks due to essential maintenance, calling the timing “terrible” as it prevents people from claiming immediately.
Financial Impact and Claiming Process
Once approved, the allowance applies automatically through an adjusted tax code for the current year. However, backdated claims are paid as a lump sum via cheque or bank transfer.
Lewis clarified:
“The way it works for the current year is that your tax code is changed, but for past years they send you a cheque or make a bank transfer. So the Marriage Tax Allowance is absolutely crucial to do.”
Couples can apply online through the Gov.uk website, provided they have details such as National Insurance numbers and income information.
