PRESS RELEASE -The social policy charity CARE has warmly welcomed today’s Budget announcement on the introduction of a transferable allowance for married couples which means family responsibility will be recognised within the tax system for the first time since 2000. However, the charity warns of continued discrimination against one-earner families perpetuated by successive Coalition Budgets.

CARE’s Chief Executive, Nola Leach, said:

“It is good news that today’s Budget introduces the long-awaited transferable allowance for married couples and that these couples will benefit financially from April 2015. Making this first step towards levelling the playing field for one-earner families, who have been punished within the tax and benefits system for not earning two incomes, is a critical move in the right direction to end the systemic unfairness faced by these families.”

“Unfortunately, the 2014 Budget also introduces further childcare tax breaks for dual-earner families leaving one-earner households far behind, in spite of the transferable allowance for basic-rate taxpayers. Whilst dual-earner families earning up to £300,000 benefit from childcare giveaways, the tax burden on families with just one breadwinner has continued to increase, galloping ahead of the Organisation for Economic Co-operation and Development (OECD) average. Today’s childcare announcement compounds the sense of assault on one-earner families.”

Internationally, the British tax system has been regarded as highly unusual since the year 2000 due to the absence of any recognition of family responsibility. This has created a hostile environment for families with a single income, for example a family with a stay-at-home parent or carer.

The publication of CARE’s Taxation of Families report last week revealed the disturbing implications of the individualism of our tax system. The research demonstrated that the tax burden on a one-earner married family with two children on the OECD average wage (£35,883) was 45% greater than the OECD average in 2012.

CARE is calling for a fully transferable tax allowance for all taxpayers to build on the limited measure introduced today, which allows the non-working spouse to transfer just 10% of their tax allowance to the working spouse and only if they are paying tax at basic rate. Some one-earner families who are in the higher rate tax bracket are in the lower half of the income distribution as a consequence of their family responsibility, for example the number of children that their single income has to support. Extending the amount and eligibility of the transferable tax allowance would therefore benefit all one-earner families.

Mrs Leach concluded:

“Throughout the term of the Coalition Government up until today, the contribution of unpaid parents has been undermined and belittled. Providing early-years support for a child or care for a relative is an invaluable investment in family life and should not be dismissed simply because it is not paid.”

“This is a landmark reform of our tax system, and we welcome it, but the Government needs to further help families who want to provide their own childcare or family support by increasing the size of the transferable allowance. It also needs to acknowledge the impact that significant caring responsibilities have on a single income by extending the allowance to include one-earner families whose incomes start from £41,450, the point at which higher rate tax applies.”

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For further information please contact Ruth Bessant on tel: 07581 153693 or email: ruth.bessant@care.org.uk

Notes to Editors:

1. A transferable tax allowance of £1,050 was announced today in the 2014 Budget – https://www.gov.uk/government/speeches/chancellor-george-osbornes-budget-2014-speech

2. The ‘Taxation of Families – International Comparisons 2012’ report was launched on 11 March 2014 and draws upon the latest OECD data available. The figures therefore apply to the tax year 2012/13. The full report is available online here

3. The tax burden refers to Income Tax and National Insurance paid and Child Benefit and Tax Credits received