tax for married people

[Kev]

Hi

On

http://www.inlandrevenue.gov.uk/rates/it.htm

I see various tax allowances. I dont see any where it would make
any difference if I am married or single (assuming I am not too old).

Am I missing something? Did there not used to be a general alowance for a
married "wage-earner"?

Related: is there a good online "convert gross to net income" calculator?
Which will include deducations tax/NI/...

I am not currently working in the UK, but I am thinking about
returning. I am a married man with one child.

Kevin

 

[Andy Pandy]

Hi

On

http://www.inlandrevenue.gov.uk/rates/it.htm

I see various tax allowances. I dont see any where it would make
any difference if I am married or single (assuming I am not too old).

It doesn't. This country is one of the few countries in the world where a salary
that supports a whole family is taxed exactly the same as a salary that supports
a single person.

Am I missing something? Did there not used to be a general alowance for a
married "wage-earner"?

There did. This has been replaced by an overly complicated, bureaucratic, and
regressive "tax credits" system.

Basically the end result is that families on low incomes get a good deal (the
tax credits are quite generous but taper off quickly as income increases).
Families on high incomes get a good deal (as our tax rates are relatively low).
But families with a single earner on an average income get screwed by a system
which assesses people for income tax as individuals (they only get one "personal
allowance" for the whole family), but for tax credits and other benefits as a
family.

Related: is there a good online "convert gross to net income" calculator?
Which will include deducations tax/NI/...

As a good approximation, if you earn between 7k & 30k then multiply your salary
by 0.67 and add £1758. This accounts for tax and NI. If you're in a company
pension scheme it's a bit more complicated.

I am not currently working in the UK, but I am thinking about
returning. I am a married man with one child.

If you earn between 20k & 50k you'll probably get £545 tax credits and £834
child benefit.

 

[Fred]

It doesn't. This country is one of the few countries in the world where a salary
that supports a whole family is taxed exactly the same as a salary that supports
a single person.


There did. This has been replaced by an overly complicated, bureaucratic, and
regressive "tax credits" system.

Basically the end result is that families on low incomes get a good deal (the
tax credits are quite generous but taper off quickly as income increases).

I would say very quickly indeed. Amounts to a rate of tax of 70% due to the
37% taper reduction of Tax credits + IT + NI. There is also the loss of
benefits such as housing benefit which can gobble up the rest of the take
home pay at the tune of 85%. Overall spending power from a £1.00 increase
in earning can be as low as 4.5p. This is one of the reasons why many
single parents only want to do the minimum 16 or 30 hours otherwise they
would be effectively be working at sweatshop rates. I am surprised more
employers haven't cottened on to the free perks they can give away such as
mobile phones which aren't a taxable perk!

Families on high incomes get a good deal (as our tax rates are relatively low).
But families with a single earner on an average income get screwed by a system
which assesses people for income tax as individuals (they only get one "personal
allowance" for the whole family), but for tax credits and other benefits as a
family.

With resepct there is a lone parent tax credit allowance which is IIRC the
same as the married/partner tax credit. Agreed where both partners are
working, but the other partner does has to live!
There are a few which weren't too difficult to find with Google a few months
ago.

 

[Andy Pandy]

I would say very quickly indeed. Amounts to a rate of tax of 70% due to the
37% taper reduction of Tax credits + IT + NI. There is also the loss of
benefits such as housing benefit which can gobble up the rest of the take
home pay at the tune of 85%. Overall spending power from a £1.00 increase
in earning can be as low as 4.5p. This is one of the reasons why many
single parents only want to do the minimum 16 or 30 hours otherwise they
would be effectively be working at sweatshop rates. I am surprised more
employers haven't cottened on to the free perks they can give away such as
mobile phones which aren't a taxable perk!

Exactly. A supermarket job could be ideal for a single parent, as the (taxable)
pay is crap but they usually give good tax free perks such as 10% staff
discount, share options, profit share. These won't affect tax credits.

With resepct there is a lone parent tax credit allowance which is IIRC the
same as the married/partner tax credit. Agreed where both partners are
working, but the other partner does has to live!

It is, that was really my point, I was talking about a two parent household
where only one parent works while the other looks after the kids. There is
nothing whatsoever in the income tax or tax credit system that recognises the
financial needs of stay at home parents.

Not only that, but single parents and couples who both work may be able to claim
significant help with childcare costs through the childcare tax credit (up to
£7280 per year). What the morons in this government need to realise is that
having one parent stay at home to look after the kids *is* a childcare cost, and
that should be recognised somewhere.