Marriage Tax by Martin Lewis

Are you married or in a civil partnership? If so, is one of you a non-taxpayer, and the other paying basic 20% tax? If you’ve just answered yes, then you’re one of 4.1million couples due a free £212 a year, but the likelihood is you’re in the 80% who haven’t claimed it, so I’m going to tell you how.

marriagetaxThis is all about marriage tax allowance, a tax-break introduced in April 2015. I was stunned to find out how few people know about it, and am starting to make a breakthrough. To inspire you, here’s just a few of the scores of recent tweets I’ve got on it.

TingTing: @MartinSLewis THANK YOU! Just signed up for marriage allowance, £212 in our pocket. DO IT PEEPS … it’s quick and simple to do!

Matty: @MartinSLewis Thank you for letting us know about the Marriage Tax Allowance. Only took 2 minutes to complete and £212 saved per year.

Q. Who can get it? You must be married or civil partners. If you’ve lived together for 20 years and have four kids and a dog, you are not eligible. This is a bit of social engineering by the government to have a reward for marriage in the tax system.

One of you must be a nontaxpayer, i.e., usually earning less than £10,600, and the other needs to pay tax at the basic 20% rate, which is currently for those who earn under £42,385. You both must be under 80 (then there’s another tax break). Don’t overcomplicate this.

Many people ask if they count as a non-taxpayer as “I’m a volunteer”, “I only work part time”, “I don’t work”. Stop it. Are you a UK resident who doesn’t pay income tax? If you are, you count – simple as that.

Q. How does it work? The non-taxpayer can transfer £1,060 of their personal allowance – that’s the amount you can earn tax-free – to their partner.

Imagine Tyrone earns £10,000 at a garage, and is a non-taxpayer. He can arrange for £1,060 of his tax-free allowance to be transferred to his wife Fizz. So that’s £1,060 of earnings she would’ve paid tax on at 20% that’s now tax free. As 20% of £1,060 is £212, that’s your gain.

Q. How do you claim it? It’s a really simple process. The non-taxpayer should just go to or call 0300 200 3300. You’ll need your national insurance numbers and some basic ID. Let me stress again though, it’s the NON TAXPAYER who must sign up – people do it the other way round and then wonder why they’re rejected.

Q. Do I get it every year? Yes, it’s done via a change in your tax code that remains, so it’s £212 a year gain every year and once you’ve applied it’s done automatically. If your circumstances change, you need to call up and tell them.

Q. Can I backdate the claim? Yes, you can backdate for four years, but it only started on 6 April 2015 so of course you can’t go back further than that.

Q. What if either or both of us are self-employed? It doesn’t matter. As long as you fulfil the eligibility criteria above, you can apply. The only difference is if the recipient partner is in selfassessment, it will reduce their self-assessment bill.

Q. What if I’m a non-taxpayer who doesn’t have £1,060 to pass across? It still works, it’s just a bit more complex if the non-taxpayer is earning just under the £10,600 threshold. This is because you have to transfer £1,060 of your allowance to take advantage – nothing more, nothing less.

So let’s do another example. Suppose Fred is a basic rate taxpayer married to Wilma who earns £10,000 a year, so she’s only got £600 left of her tax free allowance. She can still move £1,060 to Fred, so he gains £212 on that amount.

That lowers her allowance to £9,540, but she earns £10,000 so she’ll pay basic 20% tax on the £440 – meaning she is £88 worse off. Overall, though they’re still up over £100.

If you don’t get the maths, don’t worry, you’re always collectively up by doing this, so if you’re a non-taxpayer, even close to the limit it’s still worth applying.