LONDON: More than 2.9 m couples across the UK are missing out on a free tax break worth up to £220 a year, according to HM Revenue and Customs which has launched a campaign to get more people to apply for its transferrable marriage allowance.
Since April 2015, couples in which one person pays no tax because their income is less than the personal allowance currently £11,000 have been able to transfer £1,100 of that allowance to their tax-paying partner.
HMRC said the allowance, available to couples who are married or in a civil partnership, has been taken up by 1.3 million of the 4.2 million people it calculates as eligible.
Millions of people who have taken early retirement, a career break, extended parenting leave, or who work part-time can transfer the allowance as long as their partner is a basic rate tax payer earning between £11,000 and £43,000 a year.
The tax-break was introduced by George Osborne to counter a 2013 campaign for the government to recognise the “benefits of marriage” in the tax system. Parents, usually mothers, who gave up work to look after their children, had argued that they should be able to pass on their entire personal allowance to their household’s sole-earning partner. But it has been branded a flop by critics.
Few people are aware the tax break exists. HMRC hopes to reverse this and will let couples backdate their claim to the previous tax year, and receive a payment of up to £432.
Ruth Owen, director general of personal tax, HMRC said: “An extra £432 is a really helpful way to start 2017, especially after Christmas.”
The Treasury backed the HMRC campaign. Jane Ellison, financial secretary, said: “For the more than 4m eligible married and civil partner couples, the marriage allowance could be a welcome financial boost. What better time than the new year to claim?”
