Today CARE has published new research into how the tax system responds to families and compares the UK system with that of other industrialised countries.

CARE’s The Taxation of Families 2015 report compares the way in which different countries divided up the tax burden between families and singles in the year 2015 (the latest year for which comparative data is available) and finds the UK system wanting.

The research shows that the tax burden on one-earner married couple families with two children on average wage is 26 per cent greater in the UK than the OECD average and 17% greater than the EU average.

It also demonstrates that at an income range of 50 to 75% of average wage such families face the highest Effective Marginal Tax Rate in the developed world at 73%.

This means that if the bread winner was to increase his or her income they would only take home 27 pence from every additional pound earned, 73 pence being lost in tax, national insurance and lost benefits.

By contrast the comparable OECD average Effective Marginal tax rate is just 34%, meaning that across the OECD on average such families take home 64 pence from every additional pound earned!

In the light of this research (which echoes similar findings from previous years) CARE recommends that the Government should increase significantly the married tax allowance thereby reducing the tax burden on married couples.

Reflecting on the research findings CARE’s Chief Executive Nola Leach said:

“There is now an urgent imperative for the Government to dramatically increase the value of the transferable allowance, moving to a fully transferable allowance as quickly as possible. This would bring a substantive qualification to the fiscal individualism that has sadly characterised Britain for far too long. It would constitute a real and concrete step towards the creation of the Shared Society that the Prime Minister has now made, very rightly, a national priority.”

Click here to download the report

Click here to access slides used for a presentation on the report delivered in Parliament on 18 January