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Millions missing out on marriage allowance tax break

3rd October 2017

The marriage allowance was introduced in the 2015/16 tax year and is worth £230 in the current tax year. 

It is designed to boost married couples and members of civil partnerships where one partner pays standard rate income tax, and the other is a non-taxpayer. 

The lower earner can transfer a chunk of their unused tax-free personal allowance to the higher earning partner. 

HM Revenue & Customs estimated that 4.2million couples stood to gain but a freedom of information request by insurer Royal London shows millions have left a total of £1.3billion unclaimed.

Married couples could qualify for a useful lump sum, as well as a cut in their ongoing tax bill

Just 644,916 took up the allowance in the year it was introduced, rising to 1.17million in the 2016/17. 

So far this tax year, just over 2.2million have claimed but this suggests that another two million are still missing out. 

The perk can be backdated and an eligible couple could save a total of £662 in income tax over the last three tax years.

The perk can be backdated, so couples can receive a lump sum payment, as well as ongoing tax cuts

Former pensions minister Steve Webb, director of policy at Royal London, said take-up is shockingly low: “Even in its third year of operation, around two million couples who could benefit are not doing so.” 

With family finances tight every married couple should check whether they are eligible, including for the two previous tax years. 

He added: “They could qualify for a useful lump sum, as well as a cut in their ongoing tax bill.”