Family and Tax
CARE believes that marriage between a man and a woman is good for the family and therefore good for society. Our faith tells us that marriage is a high calling that should be respected and honoured. The book of Hebrews states that;
“Marriage should be honoured by all, and the marriage bed kept pure[i]”
The social science evidence strongly underlines this wisdom, demonstrating the overwhelming benefits of marriage to both adults and children. Please click here to read more.
Governments cannot intervene and fix broken marriages but they can create a public policy framework that supports marriage and makes getting married no harder in this country than is the case across the developed world. This is done principally by recognising marriage in the tax system and through investing in marriage support services (i.e. marriage preparation, marriage enrichment and marriage guidance counselling).
Recognising Marriage in the Income Tax System
Since 2000 the UK income tax system has been very unusual amongst large OECD economies in not recognising marriage in its tax system. In this context it is not surprising that marriage has been relatively unsupported in the UK compared with other jurisdictions.
CARE’s consultants have undertaken research which demonstrates that that the tax burden on one-earner married couple UK families with two children on average wage was 26% greater than the OECD average in 2015.
CARE has campaigned for the recognition of marriage in the tax system and after fifteen years, recognition of marriage was re-introduced into the UK income tax system from April 2015 thanks to the 2014 Finance Act. This is a very significant development.
However, whilst CARE has campaigned for a fully transferable allowance which would allow a stay at home spouse with caring responsibilities to transfer their full tax free allowance to their spouse, the 2014 Finance Act allows for only 10% of the allowance to be transferred.
In the 2017 Budget, the Government confirmed that the personal allowance would be set at £11,500 from April 2017. As a consequence the ‘marriage allowance’ is set at £1,150 for 2017/18. As recipients use the transferred allowance to offset against their liability to basic rate tax, which is charged at 20%, the allowance will be worth up to £230.
This is a step in the right direction and has gone some way toward reestablishing the principle of the importance of supporting marriage in the income tax system, but it could and should be much more effective. There have also been teething problems as the new allowance has been established; however, to date 1.6 million couples have applied for it.
Questions for Candidates
1. Do you support the reintroduction of the recognition of marriage in the tax system that took effect from 1 April 2015?
2. Bearing in mind the overwhelming evidence of the benefits of marriage for adults, children and society at large, will you commit to fight hard for the level of recognition of marriage to be raised from the current 10% transferable allowance to a fully transferable allowance?
[i] Hebrews 13:4, the New International Version Bible.