The UK’s Personal Allowance – the amount you can earn tax-free – has been frozen at £12,570 until at least 2028 due to government fiscal policies. However, some households can legally boost their tax-free earnings to £14,064 by using the Marriage Allowance and backdating their claims.
Understanding the UK Personal Allowance
- Current Personal Allowance (2024-2025 Tax Year): £12,570
- Basic Rate Tax (20%) Applies Above: £12,570
- Higher Rate Tax (40%) Applies Above: £50,270
- Additional Rate Tax (45%) Applies Above: £125,140
With inflation pushing wages higher, more people are falling into tax brackets they previously avoided. However, if you are married or in a civil partnership, you may be able to increase your tax-free income and reduce your tax liability.
How Does the Marriage Allowance Increase Tax-Free Earnings?
The Marriage Allowance allows one partner to transfer £1,260 of their Personal Allowance to their higher-earning spouse or civil partner—reducing the couple’s tax bill by up to £252 per year.
Who Qualifies?
- One partner earns less than £12,570 (e.g., unemployed, on maternity leave, or working part-time).
- The other partner earns between £12,570 and £50,270 (basic rate taxpayer).
- The couple must be married or in a civil partnership (cohabiting partners do not qualify).
By transferring £1,260 from the lower-earning partner’s allowance, the higher earner pays less tax, effectively increasing their tax-free earnings.
How Backdating Can Increase Your Tax-Free Allowance to £14,064
You can backdate your Marriage Allowance claim for up to four previous tax years, meaning you can claim a tax rebate worth up to £1,242 in addition to the current year’s tax savings.
| Tax Year | Rebate Amount |
|---|---|
| 2020-21 | £250 |
| 2021-22 | £252 |
| 2022-23 | £252 |
| 2023-24 | £252 |
| Total Rebate | £1,242 |
When added to the £12,570 tax-free threshold, this backdated tax reduction effectively increases a household’s tax-free Personal Allowance to £14,064 in the current year.
How to Apply for Marriage Allowance & Claim Backdated Relief
- Go to the HMRC Website – Visit the official Marriage Allowance portal on gov.uk.
- Check Your Eligibility – Ensure you meet the income and relationship requirements.
- Submit Your Application Online – You will need your National Insurance numbers and relevant financial details.
- Backdate Your Claim – Choose to backdate up to four tax years to maximize your rebate.
- Receive Your Rebate & Tax Adjustments – If approved, your partner’s tax code will be adjusted, and any rebates will be paid directly.
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FAQs
How much can I save with Marriage Allowance?
You can save up to £252 per year and backdate claims for up to four years, totaling £1,242 in tax refunds.
Can cohabiting couples apply for Marriage Allowance?
No, you must be married or in a civil partnership to qualify.
How does backdating Marriage Allowance work?
You can claim for previous four tax years, receiving a lump sum tax rebate for each eligible year.
What happens if my income changes after applying?
If your income or your partner’s income changes, you must notify HMRC, as eligibility depends on staying within the income thresholds.
Is the Marriage Allowance applied automatically each year?
Yes, once approved, the allowance automatically applies every tax year, unless your circumstances change.
How long does it take to receive a backdated rebate?
HMRC typically processes Marriage Allowance claims within 8-12 weeks, with backdated payments issued via bank transfer or cheque.
Will Marriage Allowance affect other tax benefits?
No, Marriage Allowance is a separate tax relief and does not impact benefits like Universal Credit or Child Benefit.
Can I cancel my Marriage Allowance claim if needed?
Yes, you can cancel your claim at any time by informing HMRC through their website.
Conclusion
By leveraging Marriage Allowance and backdating claims, eligible households can increase their tax-free earnings to £14,064 while also claiming up to £1,242 in tax refunds.
With the Personal Allowance frozen until at least 2028, this legal tax-saving strategy provides an effective way for couples to reduce their overall tax burden and keep more of their hard-earned money.
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