Do you find the child benefit charge unfair?

[fairertaxesnow]

Did you know that in most western countries, couples and families are given the option to be taxed on their COMBINED income, instead of being taxed individually? The reason for this is because it is MUCH FAIRER!

In the UK, taxes are relatively low for individuals, but they do not take into account how many people depend on that income. So a single man/woman with no dependants who spends all their money on themselves pays the same exact amount of taxes than a dad/mom with several children and a partner/spouse who stays at home because childcare is too expensive (or because it is best for young children, as research has demonstrated, or even if it's not their choice to stay at home but they can't find a job!)

Yes, there is (a pretty small) child benefit but this is capped/eliminated depending on the income level, and with only one parent earning money, the family will loose most of the benefit at relatively low income levels.

How is that fair!? This country needs to support families just like the rest of the western countries and not punish single earner families with a parent at home or working part time by placing the highest tax burden on them. Ultimately this affects the children, who are the future!

The child benefit charge is also very unfair, as many people have observed, because single earner families will start loosing their benefit at much lower household income (£50k) than double-earner families (they could earn up to £100k and have full benefits!)

Please sign the following petition to ask our government to modify the tax system to allow families to be taxed on their combined household income, just as most other countries have been doing for decades:

petition.parliament.uk/petitions/216429

Also, please share it with as many people as you can! The government will only respond if we reach 10,000 signatures!

More info:
www.telegraph.co.uk/women/mother-tongue/8365211/Britain-worst-place-for-tax-burden-on-single-earner-families.html
www.theguardian.com/commentisfree/2017/jul/11/single-income-families-inequality-workers-fathers-earnings

@RicStar, @Somersetter, @catinapoolofsunshine
Unfortunately the petition website doesn't allow much space to explain things, but the idea is that couples should be given the OPTION to be taxed individually or as a couple. As you point out, it is wrong to disincentivate mothers to go back to work! Just as wrong as it is to make it financially disadvantageous to stay at home. Research has demonstrated that it is best for young children to be raised by their moms if possible, but let's not forget that for many families, staying at home is not a choice but childcare is too expensive so it is the only option.

In most countries you have the choice how you want to be taxed. If both parents work and have a similar level of income, then they can choose to be taxed independently as it may be better financially. If, however, one of them earns significantly more than the other or is a single earner, then they can choose to be taxed on their combined income, but then a different tax free allowance and tax brackets apply that strike a balance between taxing families much more than individuals or taxing them much less.

Thank you @Slightlyperturbedowlagain for making that point. As I posted on another thread, our society needs children. Children are the future and in twenty years, they will be the ones paying the taxes that will keep the NHS, pension and benefits system and the country in general running.

Therefore, even individuals who choose not to have chidren benefit enormously from other peoples children.

The aging population is a well known problem and it is therefore very short sighted to place the highest tax burden on families and make it unaffordable to have children.
@Baubletrouble43, children use more resources but this is an investment in the future of the country.

"child benefit should be abolished and the money distributed to those that actually need it"
@Lanaa, can you please explain what section of the population needs the money more than families with children?

From a recent newspaper article:"Compared to the overall population, children remained the most likely to be in relative poverty, at almost one in three compared with 21 per cent of working age adults and 16 per cent of pensioners."
www.independent.co.uk/news/uk/home-news/child-poverty-increase-children-family-benefit-households-a8268191.html

Don’t underestimate the value of time ‘at home’ as well though, it’s very clear how much that is worth when you don’t have enough of it.
I do think too that it’s unfair that the winter fuel payment isn’t removed for wealthy pensioners.

I should probably be clear that I don’t support combined taxation as I think it increases opportunities for financial coercion and abuse and feel that a better solution is for couples who can afford for someone to SAH to both work part-time.

What do you mean that it increases opportunities for financial coercion and abuse?? In any case, this seems an argument similar to saying that knives should be forbidden because they can be used to stab people. Just because it may occasionally be misused is not a reason to punish everyone else who would benefit from an option to be taxed on their combined income.

@fairertaxesnow I think that says a lot to be honest. Its a free £238. Yes I think that is quite a lot as I do absolutely nothing to earn it other than exist and be married. Same with CB, thats generous as well.

The cap on CB is not set at a relatively low level. To lose CB altogether you need to be earning something in the region of £65k. So over twice the average national income. (And yes I know London is so expensive, I live in the SE so not totally unaware that it is not worth the same everywhere.) As I said the application of the cap is unfair, but the cap itself is fine. Why should wealthy people get government benefits they don't need? Universal Free School Meals in Infants should get taken away as well. They should use the money to up the income level at which families can get FSM through school, or actually help schools fully cover the cost of FSM so they dont have to pay them out of their budget. Same with the farcical 30 hours policy, cutting the cost of childcare for predominantly wealthier families, and making everyone else pick up the bill as the hours aren't properly funded.

Also, many jobs won't give you the option to work part time so having both parents work part time, while it sounds like an ideal option, is just not available for the mayority.

Unfortunately the petition website doesn't allow much space to explain things, but the idea is that couples should be given the OPTION to be taxed individually or as a couple.

Well, again, that would be a huge tax cut, and if we're going to do that I'd rather we started with the low paid than with high earners with SAH partners.

And 'research' has not shown that it's better for children to have a SAHP; it's been decidedly mixed on that.

I agree that high earners are the ones who should be taxed more, people seem to think that only rich people have SAHPs! There are many reasons why a parent stays at home, often the cost of childcare is much or more than the person would earn after tax so it is is cheaper to stay at home.

And research has shown that it is decidedly worse for children to be in childcare:
www.nytimes.com/2003/07/16/us/two-studies-link-child-care-to-behavior-problems.html

Here's another petition that may reflect more the opinions of people on this thread:

"Redesign the taxation system to support families with children"

Give families the option to be taxed on their combined household income and design a tax free allowance as a function of the number of people who depend on that income. Single-earner families and single-parents carry the highest effective burden of the tax which is an unfair and short sighted policy

With an aging population, we need children who will be the taxpayers of the future. Our tax system should therefore support and encourage families to have children, not make it unaffordable. Children are currently the population sector most likely to be in poverty, while single adults without children enjoy some of the lowest tax rates in the developed world. The existing system with child benefit and child tax credits is unfair and cumbersome. A tax system that includes an option of combined household income is common sense and is the standard in most countries in the western world.

Click this link to sign the petition:
petition.parliament.uk/petitions/219293/sponsors/new?token=csJI9AprBJQndfFP8YTJ

Not that it's going to make any difference! I don't think the government takes these petitions very seriously, I am afraid.

I don't want to get into a SAHM/WOHM debate with you here, but the picture is mixed and has been for decades (this link is a bit old, but much more recent than yours!):

www.theguardian.com/lifeandstyle/2010/oct/02/nurseries-childcare-pre-school-cortisol

And if you're worried about women being forced into SAH due to childcare costs you'd be much better directing the money that your proposals would cost into higher levels of childcare subsidy.

@Squeegle, sorry for the delay, here is the link, I hope it will be clickable now

petition.parliament.uk/petitions/216429

@MargaretCavendish
Thanks for the article, in my opinion it basically supports what I have said. Basically all the research points that childcare before the age of 2 has negative effects. Some studies say the effects are not very pronounced, but they showed that children who started childcare as babies had higher levels of stress and more incidence of behavior problems.
Of course, the point of the article is that parents who have chosen or had no option but to put their babies in childcare shouldn't feel bad about it, they haven't caused them irreversible trauma! But the research is clear, for most children being with a parent at home is healthier at least until 2 years old.

I worked for HMRC for a short while before independent taxation came in in 1990/91. We frequently had phone calls from women who didn’t want to declare their small amount of savings income or small pay rise or bonus on the joint tax return because they didn’t want their husbands to know they had it for various reasons. Not everyone is in a loving and sharing relationship, and if you combine taxable income there has to be a degree of openness whether you like it or not.
To some degree for many couples there is an element of choice about being a SAHM, and it’s one you make taking into account the pros and cons. The end of the spectrum that worries me is those who are below the child benefit cap I’m afraid, those for whom childcare costs force a lack of choice about staying at home.
The point (I made badly) about part-time working is that if we are going to socially engineer using financial incentives then let’s create something better for the whole family. I don’t think it’s ok anymore to promote the pattern of one parent exclusively working for pay and the other exclusively working in the home. Sorry that isn’t what you want to hear.

Plus I disagree with you about the effects of childcare before the age of 2. It’s not compelling evidence either way when the whole body of evidence is reviewed and there are so many confounding factors involved (quality of childcare in the care-setting and at home being just 2 major ones, mental health of adults involved, etc) that it’s impossible to identify cause and effect. The children who seem to struggle the most in our primary school are those with SAHM. They are much less resilient. But that is purely anecdotal and therefore irrelevant as it isn’t evidence and I’m not unbiased.
Families have to make their choices the best they can given the pros and cons of each.

You make a very valid point @Slightlyperturbedowlagain
It would be great to promote a more balanced family-work life with two parents who work part time and both share the income and care responsibilities equally. I agree that this is ultimately what we should aim for.

On the other hand, that feels like a much further away goal that would require big changes to our society. Such a setup will hopefully come, but gradually and over a long period of time.

Tax policy on the other hand can be changed much faster, in a matter of a year or two if there is political will. And my main goal is to convince the government that children and families need far more support than they are receiving and that they shouldn't have the biggest tax burden as they have now. This would also greatly benefit our society as a whole.

Regarding financial abuse, it is unfortunate when people are in an abusive relationship but there are definitely better means of helping such women than forcing independent taxation for everyone. And what I am proposing, anyway, is to be given the choice of joint or independent taxation so women can still choose to stay independent.

fairer your choice point is purely theoretical. In reality it's Hobson's choice.

Nobody is going to choose the option that has their family paying more tax, so couples with a high and lower earner default to the shared tax, which often drives the lower earner out if work after a second maternity leave (given that often the lower earner is the lower earner due to having taken a maternity leave and gone part time).

The system is inherently misogynistic at its core and joint taxation perpetuates that.

The option to choose isn't real as nobody will on principle choose to be taxed separately if it means less in the family pot, but that creates the scenario in which it costs money for the woman to return to work - not just after 2 years but after 4, or 6, or 8. Finally there is no need for childcare but what's the point in taking a minimum wage 0 hours job, which might be all a previously average earner can get after 10 years our of the job market, if you pay higher rate tax on your 9k per year, what's left of your wages won't even cover work clothes and travel costs... It's a downward spiral and the "choosing" is largely an illusion.

Few people expect their relationship to become financially abusive - it often only happens once a woman has already become dependent. Nobody expects the DH they gave their financial independence for to leave... Nobody has all the information or a Chrystal ball when they make decisions about sharing tax allowances and hitch their pony to a wagon that can make it financially pointless to work.

I don't want to be jointly taxed with a man, it's a huge step backwards for equality.

I'd sign to scrap CB though and see the money go to better use.

How does this work for single parents with noone to share the tax burden with????

It would be great to promote a more balanced family-work life with two parents who work part time and both share the income and care responsibilities equally. I agree that this is ultimately what we should aim for.

And yet you have repeatedly complained about couples who both work and earn below the CB cap. That's exactly the situation DH and I are in, we both work PT so we can look after the kids, thereby keeping both our earnings below the limit for CB (when the kids were small we kept below HRT as well but have increased our hours now).

Tax has always been used to push people to behave in certain ways, from tax on alcohol and cigarettes to encouraging women to work. And that is what individual taxation encourages.

Oh, and by following the traditional path of being a SAHP you help perpetuate the uneven model of paid work being a masculine activity that does not welcome women who inconveniently need time off to have babies and then won't work all hours because they have the second shift to do when they get home.

And research has shown that it is decidedly worse for children to be in childcare:
So predictable that this would be your view. Of course, for each research you quote, someone else could quote one that tells exactly the opposite!

I went back to work FT when my children were under 6 months. No such things as tax credits at the time, and then the mortgage had to be paid and the rest. My OH and I earned exactly the same, so giving up one income was a massive dent so not an option. I'm pleased to report that our daughter is about to go to study medicine and our son is expected level 8 and 9 at his gcses. Both are healthy and happy children. Childcare must not have done them that much harm and now that I've gone through a few promotions, my income mean I don't have to feel sorry for myself that we're not illegible for CB any longer.

I don’t have a problem with a cap on child benefit but I think it should be done on household income. I would like to work but don’t because DH has a job which makes it near impossible so we have 5 people living on one income. Friends earn considerably more in total household income but still qualify for extra income like CB as individually earn below the threshold. Still don’t get why this is ok. Either you have too much family income or you don’t surely.

I like being taxed as an individual
I think child benefit is an odd set up all round. I'm not sure what I think should be in place though