Families with a stay-at-home mother can pay 15 times as much income tax as their counterparts in Germany, according to a new analysis of the tax system on Sunday.
It said that families who live on the salary of a single typical earner pay taxes a fifth higher than the average tax bill in the western world – while single people pay nearly a tenth less.
The report for the charity CARE blamed the British tax system for failing to take account of marriage or of people’s responsibility for raising children.
Families with a stay-at-home mother can pay 15 times as much income tax as their counterparts in Germany, according to a new analysis of the tax system on Sunday
Elsewhere in the developed world tax rules are operated to help rather than penalise families, it said.
The analysis prepared by former senior managers at HM Revenue and Customs said that ‘treatment of one-earner families on the average wage is clearly unfavourable by international standards.’
Concerns over the way families who rely on just a single wage are given no help by the tax system have grown in recent years.
Such families – usually those where a mother chooses to stay at home to raise her own children – face a greater risk of poverty and the criticism of politicians who say mothers should go out to work.
Concerns over the way families who rely on just a single wage are given no help by the tax system have grown in recent years
Researchers for the charity looked at figures collected by the club of developed nations, the Organisation for Economic Co-operation and Development, which showed that a single earner family in Britain on pay of £36,571 a year are taxed 20 per cent more than the average for a OECD country.
A one-earner married couple with two children, they found, pay 70 per cent more than a similar family in France and over twice as much as a similar family in the United States.
They said that the tax system can be harsh for poorer parents who rely on just one wage.
A one-earner married family with two children earning three quarets of the OECD average wage, the report found, have 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 justd 27 per cent, with the rest sucked up by tax, national insurance, and the loss of state benefits.
CARE chief Nola Leach said: ‘The Government has previously said that 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 the tax systems 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 £4 billion currently 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 that an earner whose spouse stays at home can benefit from both the couple’s income tax allowances.
David Cameron’s government was 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.
Senior Tories including former Chancellor Lord Lawson and Brexit Secretary David Davis have backed the idea of transferable tax allowances to help families with children.
:: Developers and homeowners could be allowed to add more stories to properties without planning permission are being considered by Philip Hammond, it was reported last night.
The Budget could relax planning laws to allow houses and blocks of flats to be raised to the tallest building or tree in the same area without the cost of council approval.
The ‘build up, not out’ plan is being pushed by MPs as a way to help solve the housing crisis without building on greenfield land.