UK families said to have ‘worse tax burdens’

Middle-class families in Britain where one parent stays at home to look after the children pay more than a third extra in tax than those in other Western countries, new research claims.

Couples earning £33,745 a year bear a tax burden that is 39% higher than those in the 33 other countries in the Organisation for Economic Co-operation and Development (OECD), a report found.

Care, a Christian social policy charity, said the disparity would worsen to 50% by 2012-13 as child benefit was axed for families where one parent earned more than £42,000 a year.

The charity’s chief executive Nola Leach said: “The treatment of married couples on modest and average incomes in the tax system remains unfair and out of line with the rest of the OECD.

“This failing is damaging family life, trapping children in poverty and hitting those on middle incomes the hardest.”

The report, The Taxation of Families 2009-10, studied the impact of the tax system on families in the UK compared with other OECD countries.

It said the withdrawal of child benefit would have little effect on the richest households in the UK, but would impact on “those around the middle and the upper lower half of income distribution”.

Single people on the same wage with no dependants would see little change in their tax burden, the study found.

Mrs Leach urged the Government to “deliver on its commitment to recognise marriage in the tax system”.

However, the report also welcomed the introduction of the Universal Credit System, which the charity said would “erode the couple penalty for those on lower incomes”.

Source: Press Association

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