Martin Lewis has warned around two million married couples and civil partners across the UK are missing out on a tax break worth up to £1,260, as he urged households to check their eligibility before the end of the tax year.
The money saving expert said many couples who qualify for the Marriage Tax Allowance have never applied, despite the scheme offering a straightforward way to reduce their overall tax bill.
The allowance allows a lower-earning partner to transfer £1,260 of their unused Personal Allowance to their spouse, provided they earn below the £12,570 tax-free threshold and their partner is a basic-rate taxpayer earning £50,270 or less.
When the transfer is made, the non-taxpayer’s allowance falls to £11,310 while the taxpayer’s threshold rises to £13,830, creating an annual saving of £252.
Salaries and pensions are both treated as income for the purposes of the scheme, meaning retired couples may also benefit.
Speaking on The Martin Lewis Money Show, Lewis said: “The key requirement is that one partner must be a non taxpayer, and it is the lower earner who has to apply because they are the one transferring part of their allowance.”
Claims must be submitted through a free form on the Government’s website.
Couples are being encouraged to act before April because claims can be backdated for up to four tax years, potentially generating a lump sum payment of up to £1,260 for those who have qualified but not applied.
The allowance allows a lower earning partner to transfer £1,260
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Martin Lewis
Mr Lewis said: “One of the main reasons so many households miss out is because they do not realise they can backdate, and that deadline is crucial if you want the full amount.”
The warning comes as marriage rates in the UK continue to decline, with the cost of weddings and divorces frequently cited as contributing factors.
Despite this trend, Mr Lewis said marriage still carries financial advantages, with the Marriage Tax Allowance among the most significant for eligible couples.
He cautioned that the scheme does not benefit every household in all circumstances.
Couples can benefit, Martin Lewis said
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GETTY
Non-taxpayers earning between £11,310 and £12,570 could, in some cases, be marginally worse off because of the way their tax position changes once their Personal Allowance is reduced.
Mr Lewis said couples within that narrow income band should check their figures carefully before applying to ensure they would benefit overall.
He added the majority of eligible couples are likely to gain from the allowance. And that the number of unclaimed applications indicates many households are unaware the support exists.
With millions still estimated to be missing out, couples are being urged to review their income levels and consider applying if they meet the criteria before the tax year ends.
