Two million couples miss out on tax break

Nearly half the couples eligible to claim marriage tax allowance are still failing to do so, according to HM Revenue and Customs (HMRC).

The tax allowance – worth £230 a year – can be claimed by married couples or those in a civil partnership if they meet certain conditions.

However, since it was introduced in 2015, only 2.2 million couples have claimed it, from 4.4 million eligible.

The government said it had now simplified the application process.

Last year, HMRC reported that only a quarter of eligible couples were claiming.

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”.

“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,” he said.


How Marriage Allowance works

  • Partners must either be married, or in a civil partnership.
  • One partner must be working, 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 be made for previous years

HMRC has organised several advertising campaigns to persuade people to apply for Marriage Allowance, and is known to be frustrated by the lack of take-up.

“Applications have increased year on year, and the application process is easy, and families can apply at a time which is convenient for them,” a spokesperson said.

Steve Webb said the complexity of claiming might be one reason why so many people have not applied.

“I suspect people don’t know who’s eligible, or how to go about claiming it,” he said.

A government spokesperson said: “2.2 million couples across the UK are keeping more of the money they earn thanks to the Marriage Allowance.

“Applications have increased year on year and we have simplified the application process to make it easier for families to apply at a time which is convenient for them.”

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