Report

Family-friendly taxation

This report from UK think tank the Centre for Policy Studies looks at how to restore fairness to the tax system.

The British tax system is also much less kind to families than other comparable countries. At the average wage, a single-earner married couple with two children will pay more tax here than in France, Germany, or the US – and more than the OECD average. ‘Family-Friendly Taxation’ recommends that when it can afford to cut taxes, the Government should prioritise turning the marriage allowance into a fully transferable personal allowance for parents. A transferable allowance for all married couples would cost £6.1 billion but reduce poverty by 4.3%, with poorer families getting the greatest benefit. One in ten households would see their net income rise by more than 5%. However – in the short run – we would recommend a more affordable version, covering only parents with children under 18, which would cost £3.6 billion The report argues that in the longer term, the Conservatives need to completely rethink family taxation and childcare subsidies, drawing on lessons from France, Germany and elsewhere.