UK married families taxed more than other countries

Married families where one parent stays at home are under a heavier tax burden in the UK than in other countries, new research shows.

The study into marriage tax follows separate research estimating that the fall-out from family breakdown is costing the British economy £37 billion annually.

Launched in time for National Marriage Week, the new figures will pile pressure on politicians to reform the system to support couples who get married, rather than penalising them.

Researchers at the think-tank Christian Action, Research and Education (CARE) compared the UK’s tax system with that of other developed countries.

They say that while other countries find some way of recognising marriage in the tax system, Britain is failing to adjust the amount of tax paid by earners with dependent spouses.

A married UK family with one earner and two children pays 20.6 per cent in tax if they are on an average wage.

This is almost double the burden on families overseas. In America such families pay nearly twelve per cent, and in Australia just ten per cent.

Meanwhile, a single person on an average income with no dependents pays 27 per cent tax in the UK – this would only fall by six per cent if they were supporting a spouse and two children.

But in other developed countries they would pay an average of twelve per cent less under the same circumstances.

“Tax policy has seen taxpayers as individuals and not as part of a family”, the authors conclude.

They say the “failure of tax credits to take account of the financial needs of a second parent is making it difficult to reduce child poverty” and “damaging family life by discouraging couples with children from marrying or openly living together”.

Research shows that married couples are more likely to stay together and to bring up happy, healthy children, than any other kind of arrangement.

Cohabiting relationships are far more likely to break down than marriages, with disastrous consequences for any children involved. Yet worryingly, 44 per cent of babies are now born to unmarried parents.

The study’s authors say: “There is now a groundswell of support for reforming the British tax and benefit system. The system is resented because it is so biased against one-earner couples who wish to look after their own children.

“There is growing recognition that it penalises stable couples and encourages family breakdown and un-partnered childbearing.

“There is also a widespread belief that the Government should provide more support for marriage.”

The Rt Hon Frank Field MP said: “A fiscal priority is to recognise two parent families when levying tax and calculating the eligibility to tax credits.

“Ceasing discrimination against two parent families would also be the most significant move a Government could take in helping create the most stable environment in which to nurture children.”

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