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COVID-19: Don't lose sight of marriage allowance

24 March: ICAEW's Tax Faculty is urging members not to forget the marriage allowance and the potential support it could offer couples in these uncertain times. The faculty outlines who is entitled to the allowance and claims can be made.

Marriage allowance may offer some help to those whose financial circumstances have changed, making a claim worthwhile for the first time. The deadline for backdating claims to 2015/16, the year in which the relief was introduced, is approaching on 5 April 2020 and relief may be lost if a claim is not made by that date.

Marriage allowance allows an individual to transfer 10% of their personal allowance (£12,500 in 2019/20 so the amount transferred is £1,250) to their spouse or civil partner. 20% of this allowance is given as a reduction in the recipient’s tax bill, giving a saving of up to £250 tax for the couple.

The full benefit is available only if the person giving up the allowance is not using it and the person receiving the tax reduction can use it. The recipient must not pay higher rate tax.

Claims should be made by the individual with the lower income who is transferring their allowance to their higher income spouse or civil partner. Claims are made online, but can also be made through self assessment returns or by phone. 

The allowance was first introduced for the 2015/16 tax year and claims must be made within four years of the end of the tax year; this means that the deadline for 2015/16 is 5 April 2020 and relief may be lost if this is missed.