In Depth

Why the married tax allowance has been an 'utter flop'

Couples can only claim back £212 a year - but most are unaware the tax break even exists

Ever since the Conservatives first got into Downing Street they talked about a marriage tax allowance that would show that the government valued the commitment of marriage and civil partnerships. But, almost a year after the marriage allowance came in it has been branded an ‘utter flop’.

What is it?

The marriage allowance lets people transfer £1,060 of their personal allowance to their spouse or civil partner, so that as a couple they can pay less tax. When it was launched the Prime Minister David Cameron “said he believed the move would bolster the institution of marriage, which he believes is at the heart of a strong society,” says Laura Hughes in The Telegraph.

Cameron believed that four million married couples and 15,000 civil partners would benefit from the tax break. But the Telegraph has revealed that just 330,000 people have claimed the tax break in its first year, only eight per cent of the target.

“It’s embarrassing for David Cameron and George Osborne that their flagship policy has been a complete and utter flop,” Jonathan Ashworth, Labour’s Shadow Minister without Portfolio told The Telegraph.

Why is no-one claiming it?

It’s believed that part of the reason for low take-up is that very few married couples are aware of the tax break.

Another problem is that the tax break is pretty paltry, the maximum amount a couple can save on tax is £212. When the tax break was announced Labour criticised the proposal, “branding Mr Cameron ‘out of touch’ if he thought that people would marry ‘for £3.85 a week’,” reports Lucy Fisher in The Times.

In order to increase take up of the marriage allowance it needs to be “more generous and more targeted at couples with young children,” says David Burrowes, the Conservative MP for Enfield Southgate, in the Telegraph. “We need to make sure that our commitment to recognise marriage in the tax system is more than window dressing. I will be pressing the Treasury to increase uptake.”

Reports have stated that the Centre for Social Justice, a leading Tory think tank, is lobbying the Chancellor, George Osborne, to raise the level of the allowance. 

Am I entitled to it?

The marriage allowance is available to married couples or civil partners where one partner earns less than £42,385 a year and the other earns less than the threshold when income tax kicks in – currently £10,600. Where this is the case, the low-or-no earning partner can share some of their tax allowance.

“Married couples should make sure applying for marriage allowance is part of their financial planning for the year ahead,” says David Gauke, the Treasury financial secretary in the Times. “Those paying the basic rate of tax can get up to £212 each year, and it’s quick and easy to register. We are also going to give couples up to four years to claim backdated allowances so that as few as possible miss out.”

If you qualify you can apply for the marriage alliance via the government’s website.

What about widows and unmarried partnerships?

Not everyone likes this idea of rewarding the traditional institution of marriage.

“Labour has always said that the Tories’ marriage tax allowance is perverse and unfair,” says Ashworth. “It’s a benefit that doesn’t go to the vast majority of families, doesn’t go to widows and doesn’t go to people who have been left by an abusive husband. It’s clear the Tories need to rethink this whole policy.”

“The marriage tax break only benefits couples, who are generally better off than cohabiting or single parent families,” says Fiona Weir, chief executive of Gingerbread, a charity that supports single parents, in The Mirror. “Modern families come in all shapes and sizes and the Government should support them all, not just those who are married.”

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