HMRC tax allowance perk worth £1494 that can be backdated missed by thousands of couples

The tax-free Personal Allowance has been frozen for years and, unless there's a reversal under the new Labour government, it is set to remain frozen for at least another four years, until 2028. This means that due to 'fiscal drag', an increasing number of people will end up paying more tax on their earnings as wages rise to counter inflation and more people earn money that's subject to income tax.

The Personal Allowance is the amount you can earn before you start paying tax and it remains at £12,570, which it's set to stay at until 2028 at the earliest. Consequently, everything you earn above that is taxed at 20 per cent, or 40 per cent for a higher and 45 per cent for an additional rate taxpayer.

However, there is one way to increase your tax-free Personal Allowance - but you have to be married or in a civil partnership. Married couples or those in a civil partnership can boost their tax-free take-home pay by £252, as well as backdating their claim to get a tax rebate up to £1,242, which when added to their Personal Allowance for the year comes out at £14,064 tax-free, reports the Express.

READ MORE: How to claim up to £290 free cash to help you with your bills

To qualify, one partner must earn under £12,570 - for instance if one of the couple is no longer working, has lost their job or is taking a career break for childcare. The other must be a basic rate taxpayer earning between £12,570 and £50,270.

The Marriage Allowance process allows the partner with lower earnings to transfer £1,260 of their Personal Allowance to their higher-earning spouse, thereby reducing their tax liability. More than 2 million Brits take advantage of this income-boosting perk each year.

For the 2024-25 tax year, a minor adjustment was made allowing individuals earning between £11,130 and £12,570 to transfer their Personal Allowance. However, earnings within this range are still subject to taxation.

Despite this, it still results in savings, albeit not as significant as for those earning less than £11,130.