UK ‘punishes’ single-earner families, new tax report finds

Single earner families in the UK face far higher tax burdens than those living in other Western countries, a new report shows.

Christian charity CARE has found that UK families living on a single income of £27,000 keep only 27p of every extra pound earned.

However, their counterparts in the Organisation for Economic Co-operation and Development (OECD) – the world’s 34 richest countries – keep 66p.


“Comparable British families” also took home the same amount in the 90s when the tax system had “recognition of family responsibility”, the charity said.

The report states that Britain deducts the most money in tax and benefit withdrawals for every additional pound earned – Effective Marginal Tax Rate (EMTR).

CARE’s Chief Executive Nola Leach said it is “scandalous” that the Government places the “highest EMTR – 73 per cent – on low to modest income one-earner families seeking to improve their circumstances”.


The tax burden gap between one earner and dual earner families in the UK is far greater than in the OECD or European Union, CARE’s report showed.

A one earner family on an average wage of £35,883 faces a tax burden that is almost 50 per cent greater than what their counterparts in the OECD would bear.

CARE analysed the latest OECD data from the tax year 2012-13 and concluded that the UK “punishes one earner families”.

They pay 80 per cent of a single person’s tax while the average OECD family pay just 55 per cent.

Stay-at-home mothers

More than a third of working mothers would give up their jobs and stay at home to look after their children if they could afford it, a Government survey in January showed.

Six in ten mothers would cut their hours to spend more time at home if they could afford it.

The Bishop of Chester, Revd Dr Peter Foster, who wrote the foreword to CARE’s report said, “I find it deeply troubling that families where one spouse is in full-time paid employment and the other is undertaking unpaid care can be treated in such a way”.

Ray of hope

He did however say that there was a “ray of hope on the horizon” with the introduction of the tax breaks for married couples next year.

The scheme, which will come into effect for the tax year 2014-15, will allow a husband or a wife to transfer £1,000 of tax-free allowance to the higher earner.

However, for low-income families it may only be worth £200.

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