UK families with stay-at-home parents taxed more than almost all other countries

Jeremy Hunt and the Government is being urged to carry out a full review on family taxes – Simon Dawson /No 10 Downing Street

Families with one stay-at-home parent are taxed more in Britain than almost any other advanced country in the world, a report has found.

The research – sent to Jeremy Hunt, the Chancellor, ahead of his Spring Budget – shows that the single-earner, two child family is treated more harshly by the taxman in the UK than the majority of western economies.

In a global league table of 32 nations, the UK is ranked 26th, sitting above countries such as Finland, Lithuania and Greece.

Alongside highly populated wealthy nations such as Germany, the United States, France and Japan, the UK imposes the highest level of taxes on families with a stay-at-home parent.

Using a system of points scoring based on tax treatment of families worldwide, the Czech Republic comes out top with 193 points, followed by Poland with 161.

Germany is close with 100 points and the US is well placed with 67 points. The international average is 44 points, with the relegation zone headed by the UK on just 3.5 points.

Bottom is Greece, which defaulted on a debt of €1.6 billion to the IMF in 2015, with minus 6 points.

The report from the Family Hubs Network (FHN) urges the Chancellor to start unwinding the country’s tax raid on the family by doubling the marriage allowance in his Budget, which could boost family incomes by an extra £252 a year.

The FHN is also calling for more radical change – ditching the taxation of parents as individuals and replacing that system with a levy on the overall household income, as many other similar countries already do.

It comes after the FNH conducted a recent survey which found nearly 20 per cent of the public would be more likely to vote Conservative at the election if the Chancellor unveiled a genuine “Budget for Families” in March.

The poll found over a third of the public (35 per cent) believe that cutting taxes for families should be a priority for Mr Hunt. This rises to 55 per cent of parents with children aged under 18.

Supporting families is ‘no-brainer’

Tory MP Miriam Cates said: “This timely report is clear that helping families through the tax system would be a hugely popular move.

“More than that though, it is the right thing to do. The benefit of family is unmatched for society – stronger family ties lead to better educational outcomes, better job prospects and reduced levels of crime.

“Supporting families should be a no-brainer for the Conservative Party. Changes to remove unfairness in Child Benefit in particular should be brought forward at the earliest opportunity.”

The report has four main recommendations for the Government including doubling the maximum value of the Marriage Allowance to £504, to soften further the disproportionately high tax burden faced by families with dependents where one parent earns nothing or significantly less than the other.

Nearly half of the country (49 per cent) would support such a change, according to the poll.

It also calls for an adjustment to Child Benefit which addresses its anomalies (and complexities) where one parent earns at or around the withdrawal threshold, a comprehensive review of how families are taxed and more funding for family hubs for the remaining local authority areas.

%n

Discover Telegraph Wine Cellar’s new wine club. Enjoy expertly chosen bottles at exclusive member prices. Plus, free delivery on every order.