To think ‘household income’ should be a tax option?

[MeteorGarden]

(Disclaimer- I’m actually not a parent but grew up in a low income family where this would have made a world of difference)

It’s discrimination at its most socially blatant. HMRC may as well be dipping their hands straight into the pockets of family units and taking hundreds of pounds every month.

**Imagine: Two identical families have an annual income of £24,000
Family A- Has one person working full time whilst the other other provides childcare to 3 small children.
Family B - Both parents work part time earning £12,000 each whilst tag teaming childcare.

At the end of the month A take home £1600 whilst B get £1900. For the EXACT same hours and EXACT same salary!

How much difference would £300 per month make to a struggling family? What does it matter to HMRC whether one person earns or both? If you’re cohabiting/ married and share children you’re functioning as a family unit which shouldn’t be discouraged or disregarded by the government.

Why are HMRC happy enough to count ‘household’ income if it means they can refuse a benefit claim but refuse to offset that by offering a tax break?

**Imagine: Two identical families have an annual income of £90,000

Same set up as above.

A bring home £5000 per month whilst B bring home £5600 per month. To add insult to injury family B also get child benefit 😂🙈 - I bet they need it, surely it’s hard to survive in £5600 a month!

My point is that regardless of your income level, family units who split work unevenly (for whatever multitude of reasons families face) are being pick pocketed by the government.

(Disclaimer - I’m not suggesting that ‘household taxation’ should be forced upon everyone, just those functioning financially as a family unit)

I agree. You should be able to opt for assessment on separate or joint basis.

I was a supporter of transferring tax allowance from SAHP but your suggestion is better.

It might also make errant partners think twice about squirrelling away money.

You are over simplifying a very complex issue. France and other countries have had something similar for a while. The problem is, these systems are probably fairer in the situation you describe, but unfairer in all the other circumstances in which they increase the marginal taxation of women who are deciding whether to work or not.

Unfortunately, men tend to earn more. Let's say he gets paid 50k and she gets paid 20k. Not unrealistic. In this circumstance, your system would tax her 20k more than our current system, in which her taxes don't depend on his income. The result? A great disincentive against mothers returning to work.

Note I am not saying one system is better or perfect, but that each has its own shortcomings.

Family 2 has to pay childcare which generally costs a hell of a lot more than £300 a month.

Two people earn £10k each and thus are currently not taxed.

Your proposal would have them down £2k of tax they previously didn't have to pay, particularly hard hitting for such a low income family

It's not great for women. So I don't support it.

In terms of the government, also, having 2 people in paid employment in the workforce (not in caring roles unpaid at home) brings benefits because they'll both be contributing to things like workplace pensions, less likely to need benefits long-term as they remain current in skills etc etc. So there's no incentive on a governmental level to make it 'fairer' for people to support a family unit on an unpaid basis.

I'm not saying we shouldn't place a high value on unpaid caring roles and the benefits those bring to society as a whole. But I think that's a different argument to how tax and benefits should operate.

I want to be taxed as an individual

as italient posters says I earn less than my husband. if I had to pay 40% tax just because he earns a lot it simply wouldn't make me working pay at all and I like working.

Also I don't think the government's main incentive is to make sure everyone gets exactly the same money in every situation

In your two working parents situation, that is two tax payers (and pension and NI payers, with presumably more chance to earn more and pay more tax in the future. Not to mention the childcare provider also paying tax - it seems obvious they would prefer the option with 3 taxpayers, rather than one

So what happens to the children of the two parents working family while they are working? While I feel that taxes are unfairly high on Britain I do think that your reasoning is unsound. A better option would be means tested contributions for families who choose to use the welfare state. It is extremely unfair that a family on a six figure income should send their children to a state school and use the NHS without paying for it.

I think as an option it would be great - as long as tax allowances are also shared...so if one person can earn 12k before tax a joint claim should allow 24k before tax...

I've always thought that if the DWP and HMRC award benefits on the basis of household income, then they should similarly tax on the basis of household income and not on an individual basis. Some would win, some would lose, but that's no different to the current inequality - and it would remove a massive inconsistency that really gets on my nerves!

Both political parties want both parents back in minimum 18 hour jobs and children in childcare from the age of 2 I think it is (maybe 3). That's what the tax system is set up to encourage.

State schools and the NHS are hardly the welfare state.

Hang on - you can do this to an extent in some cases. It's called Marriage Allowance. If you earn under the personal tax threshold then you can transfer over £1000 of your tax allowance to your partner, thus upping the household tax free amount.

Is applicable if you are married or in a civil partnership.

Racecar, because the family using private education is having to earn a high salary to pay school fees, thus paying more in tax, they are perfectly entitled to use the nhs that they help fund...

@mumof

I mentioned that family 2 tag team their childcare. Both working part time hours, equivalent to one full time job so one of them is with the kids when the other isn’t.

(For the purposes of the example)

I have similar concerns that it could discourage sahp from re-entering the workforce and encourage the lower paid parent to sacrifice their own career.

I know lots of families go for the model of one high-earner working long hours while the other sah but imo anything that encourages both parents to work part-time, sharing care of children and pressures of earning for the household is a good thing.

In Family A, Bob has spent 5 years training to be an accountant.

In family B, Sid and Jill work have worked in a factory packing fishfingers into boxes for 20 years.

?

No way do I agree with this
Women fought for years for separate taxation and I would see any change to that as a backward step
I have and hope to always supported my self

I know you can transfer £1000 to a spouse but that’s £1000 of your £11850 tax free allowance. Less than 10%. For SAHP that’s a minuscule difference. It’s your tax free allowance why not be allowed to give it all to one partner.

I appreciate that the government wants to encourage both parents to work but why is it their place to discourage SAHP? (a seriously undervalued role).

Do you have any idea how hard we had to fight to secure independent taxation in the first place?

Or how recently it was won?

And you just want to chuck it away on a selfish whim?

Wow.

I know lots of families go for the model of one high-earner working long hours while the other sah but imo anything that encourages both parents to work part-time, sharing care of children and pressures of earning for the household is a good thing.

I agree. It’s a toxic model and it’s terrible for women. I would not support social engineering to encourage it.

@user148

I appreciate your view and im sure many share it.

I want to stay at home with children when they’re small and personally I’d like to not face financial discrimination for my family in doing so!

I have a good career and know that my wanting to care for my own children doesn’t make me better/worse than other women or right/wrong.

Women fought for years for equality and independence, for the right to choose their own life path. But feminism shouldn’t be an obligation to choose the independent path, otherwise as women we’re no better off than we were pre winning the vote.

You want to be taxed indervidually, awesome, I don’t...that should also be supported.

Btw, those interested can look into the "family quotient" taxation in France (this is the name of the system). Clearly there are supporters and detractors, but the disincentive against women joining or returning to the workforce is an important aspect.

Why was there a fight for independent taxation by the feminists please?
Don't want to sound ignorant but am off to Google, and I'm guessing it was to not beholden to a husband or something?

Wouldn't family b get tax credits in the above scenario?