Set up Marriage Allowance in QuickBooks Self-Employed

Marriage Allowance is a tax perk for married couples or those in civil partnerships. It lets the partner who earns less to transfer £1,260 of their Personal Allowance to their spouse, who pays tax at the basic rate. This lowers the tax burden for the higher-earning partner. 

This article will cover: 

• Eligibility and application 
• Example calculation
• Setting up Marriage Allowance in QuickBooks

Who qualifies for Marriage Allowance?

To qualify, the lower-earning partner’s income must be below the standard Personal Allowance threshold, and the higher-earning partner’s salary must fall between the basic-rate tax threshold.  

You can apply for Marriage Allowance on the government website.

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How is Marriage Allowance calculated?

Let’s break it down with an example from the government website.

Disclaimer: This example is for illustration purposes only and may not reflect your tax situation. Please consult government guidance or with your accountant for more information.

If your income is £11,500 and your Personal Allowance is £12,750, you don’t have to pay tax. 

Your partner’s income is £20,000 and their Personal Allowance is also £12,570. They have to pay tax on £7,430 of their income. 

But when you claim Marriage Allowance, you can transfer £1,260 of your Personal Allowance to your partner. This means that your Personal Allowance becomes £11,310, and your partner gets a ‘tax credit’ on £1,260 of their taxable income. 

As a result, you’ll now pay tax on only £190, while your partner will pay tax on £6,170. Together, you’ll be paying tax on a total of £6,360 instead of £7,430. This saves you £214 in tax. 

Want to know how much tax you can save as a couple? Use the online Marriage Allowance calculator.

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Setting up Marriage Allowance in QuickBooks

1. Select the gear icon. 
2. Select Tax profile. 
3. Select the appropriate tax year. 
4. Indicate your marital status by selecting Yes. 
5. Enter the amount for your Personal Allowance. 
6. Specify whether you have Received or Sent a transfer allowance, and then enter the amount. 
7. Select Save.

On the mobile app

1. Go to Dashboard. Or, Home if you use Android.
2. Select Profile icon. If you use Android, select the Gear icon.
3. Select Tax profile.
4. Below Marital Status select Married.
5. Switch on Transfer Allowance.
6. Select Sent if you would like to transfer any of your allowance to a spouse, or Received if your spouse is transferring any of their allowance to you.
7. Then, next to Transfer Allowance Amount, add the amount being transferred.
8. Finally, select Save.

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