Is the tax system skewed against married couples?
Over the last few years we have seen a number of complaints regarding UK taxation and the treatment of married couples and families. While much of this has been hearsay and discounted by the government, a survey by the Daily Mail has found that some middle income families in the UK could be up to £10,000 a year better off if they were to split up. So what exactly is going on?
The figure of £10,000 a year relates to a husband and wife with two children, who between them earn around £35,000 a year. While it has to be said that a joint income of £35,000 a year is well above the average in the UK, if this particular couple were living separately they would be around £186 a week better off financially. The main problem is the tax credit system which is heavily skewed in favour of single parent families and, many people believe, contains an income penalty for couples.
The detailed calculations regarding financial strength as a family and living separately were carried out by the charity Care and incorporated all of the relevant benefit tables and taxation figures available from the UK government. How on earth have we come to the situation where families are better off living apart?
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