More than two million couples eligible for the much heralded marriage tax break are not claiming, HMRC has reported.
If spouse in a married couple earns less than the minimal amount on which income tax is payable (currently £11,000 per year), the scheme allows them to transfer part of their ‘tax-free personal allowance’ (as earnings below taxable threshold are known), potentially saving the couple up to £230 per year.
But since its introduction two year ago in a move intended to promote marriage, of an estimated 4.4 million eligible couples only 2.2 million have actually claimed. The newly published data was obtained from HMRC by insurance firm Royal London.
In January HMRC launched a campaign aimed at encouraging more people to take advantage, and it has run a number of advertising campaigns highlighting the campaign. It recently simplified the application process.
Royal London’s Director of Policy Steve Webb described uptake as “shockingly low“, adding:
“When family finances are so tight, I would encourage every married couple to check whether they might be eligible, including for the last two years, as they could qualify for a useful lump sum as well as a reduction in their ongoing tax bill.”
An HMRC spokesperson added:
“2.2 million couples across the UK are keeping more of the money they earn thanks to the Marriage Allowance. Applications have increased year on year and we have simplified the application process to make it easier for families to apply at a time which is convenient for them.”
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