UK families are paying 20% more income tax
Burden is highest of top nations
FAMILIES with a stay-athome parent pay taxes a fifth higher than the average tax bill in the western world, a study showed yesterday.
Figures from the club of developed nations, the Organisation for Economic Co-operation and Development, showed a single-earner family in Britain on an income of £36,571 a year were taxed 20 per cent more than the average for an OECD country.
The analysis for the charity CARE blamed the system for failing to take account of marriage or for people’s responsibility for raising children.
A one-earner married couple with two children paid 70 per cent more than a similar family in France and twice as much as a similar family in the US, according to the study. Con- cerns have grown in recent years that families relying on a single wage get little help from the tax system.
Such families – usually those where a mother chooses to stay at home to raise her own children – face a greater risk of poverty and can be criticised by politicians who say mothers should go out to work.
CARE chief Nola Leach said: ‘The Government has previously said it wants to support those families who are just about managing, but as our report shows, this group is still being discriminated against, by a punitive and unfair tax system.
‘Astonishingly for those families on three quarters of the OECD average, the marginal tax rates they face are the highest out of any country in this group. The problem we have identified is that our income tax system takes no account of responsibilities such as children. Although the UK tax system as a whole is not more burdensome than those of other developed countries, its treatment of one-earner families on the average wage is clearly unfavourable and its treatment of families on low and moderate incomes is appalling.’
Mrs Leach added: ‘If the Government is serious about helping struggling families, then it must act to reduce their tax burden, the highest in the western world.’
The charity called for the £4billion earmarked by Chancellor Philip Hammond for reducing income tax personal allowances for all earners to be shifted towards helping people with children. In future, it said, the Government should introduce transferable tax allowances so an earner whose spouse stays at home can benefit from both the couple’s income tax allowances.
David Cameron’s government had pledged to help married couples and in 2015 introduced a tax break which means married couples and civil partners who are not higher rate taxpayers can transfer £1,000 of their tax free allowance to their spouse or partner. The value to couples is around £200 a year.
The report found that a oneearner married family with two children earning three quarters of the OECD average wage has the highest marginal tax rates in the developed world, at 73 per cent. This means that for every extra pound the wage earner brings in, they keep just 27 per cent, with the rest sucked up by tax, national insurance, and the loss of state benefits.
‘Treatment is appalling’