Taxation and Benefits

The UK tax system ignores mothers working at home. No allowance is made for two adults in a single-income family. The mother or father who stays at home with their children is treated as either a liability or a luxury.

The tax system discriminates against the one-earner family since it pays proportionately more tax than a double-income family. We believe that transferable personal allowances should be introduced. The un-used personal allowance of the parent at home would then be transferred to the earning spouse. The family’s income would then increase thus allowing the non-earner to contribute financially to the family without having to leave the children.

We are in favour of child benefit remaining untaxed and being paid to the mother.

The present Government has made welcome increases in Child Benefit and has introduced a Child Tax Credit worth £545 pa for all families earning less than £58,000 pa (although these measures have been funded in part by the abolition of the Married Couples’ Allowance).

However, the Government has also widened the gap between two-earner families and those with a parent at home. Families using registered daycare can receive up to £7,000 pa towards the cost of that care (the childcare element of the new Working Tax Credit). Families where one parent looks after the children cannot claim, despite the fact that they have sacrificed earnings in order to provide that care.

Mothers who work at home are not considered to need help with childcare costs, despite the fact that their childcare costs are equal to the amount of their forfeited salary/wage. This is unfair and needs to be addressed.

Click here for ‘A tale of two tax families’.

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