Why the Government is right to dump the married couples tax break

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 05 February 2013  |  Comments 19 comments

The Government has put a tax break for married couples on the backburner. It should scrap the plan altogether!

Why the Government is right to dump the married couples tax break

The Government has confirmed that there will be no tax break for married couples in the Budget.

The tax cut had been included in the last Conservative manifesto and even made it into the Coalition agreement.

And it seemed an easy win for the Government, with Tory backbenchers and grassroot supporters in a bit of a tizzy at the prospect of the Marriage (Same Sex Couples) Bill which will be voted on this week.

But the newspapers were full of “senior Government sources” admitting that there would be no married couples tax break in this Budget, though they maintained it would still happen this parliament.

How it would work

The idea is that one member of a married couple (or civil partnership) who either stays at home or earns a very low income would be able to move part of their tax-free personal allowance over to their partner, reducing their tax bill.

Some reports suggested couples would be able to move around £750 of the allowance in this way.

Why it’s a nonsense

One Tory MP, Nick Du Bois, was on the radio this weekend, banging on about how the Government needs to support the most vulnerable society and this tax break is a way of doing that.

But it’s absolute tosh.

First of all, suggesting that married couples are representative of the most vulnerable people around is laughably simplistic. It’s like saying that right-handed people are some of the worst off in society. Yes there are married couples struggling to get by, but there are just as many very well off married couples doing just fine thank you very much.

The idea that the Government is offering a financial incentive for people to get married is ridiculous. And I say that as a married man who could conceivably benefit from such a move.

It’s not for the Government to promote one form of relationship over others at all. Why on earth should I be better off for getting married, compared to my brother who has been with his girlfriend for years? Why should wearing the ring on my finger be more ‘tax efficient’ than simply living together?

Couples are essentially being offered a pitiful bribe to go down the aisle, rather than – God forbid – living in sin of their own volition.

Supporters of the married couples tax break will no doubt talk about relationship breakdown and the effect it has on society. They’ll also talk about how the Government has an interest in tackling these issues.

I’m not sure I agree, but it’s a perfectly valid argument to make. But it raises two questions. Firstly, is the institution of marriage really the way to tackle those issues? And secondly, is a tax break that will likely give married couples £150 or so more a year the way to do it?

I highly doubt it. I’ve got nothing wrong with the plan to move part of your tax allowance over to your partner – in fact, I’m actually a fan of it. I just think it’s daft that in order to do so, you need to get married first.

But what about you? What do you think? Should the Government crack on with a married couples tax break? Or is it none of the Government’s business how you choose to form relationships? Let me know your thoughts in the comment box below.

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Comments (19)

  • rbgos
    Love rating 84
    rbgos said

    I both thoroughly agree, and totally disagree, with this article!

    I agree that it is none of the government's business how we conduct our relationships; I also agree that a small tax break won't (or at least it shouldn't!) have any impact on anyone's decision to get married. Talk of "supporting" or "encouraging" marriage is nonsense.

    However, I'm still in favour of the tax break, just because I think it is morally right: the income is shared over the whole family, regardless of who is earning it, so the tax allowances should be to. If one partner is staying home to look after the children it's right that (s)he should still be able to make use of their tax-free allowance by setting it against her/his spouse's income. But it should be the whole allowance, not just a few quid.

    Restricting this to married couples makes sense on a purely practical basis - otherwise it would be a free-for-all where anyone not working would find a way to transfer their allowance to anyone else at all, and there'd be a black market for unused allowances.

    N.B. this should also apply to gay marriages! Although I'd imagine there are rather fewer of them where one partner works and the other doesn't...

    Report on 06 February 2013  |  Love thisLove  0 loves
  • Mike10613
    Love rating 626
    Mike10613 said

    I think the personal allowance should be transferable so that someone not claiming benefits can transfer their personal allowance to someone who supports them financially. The person supported could be a husband, wife, brother, sister or elderly parent. Marriage is about having children, not a convenient financial arrangement or state approval for any type of behaviour, moral or immoral.

    Report on 06 February 2013  |  Love thisLove  2 loves
  • PDB11
    Love rating 75
    PDB11 said

    I think financial incentives for people who are married are a bad idea. They don't reduce relationship breakdown - they merely make it more likely that people in a broken relationship will be stuck with each other.

    I think the whole institution of marriage needs an overhaul. Yes, even the religious bits, some of which are still valid, others of which are rooted in an Old Testament society where keeping the birthrate up was a high priority, and still others are obsolete for other reasons.

    Starting from scratch, what might we have?

    Term marriages? Who's up for a five year marriage contract?

    Marriages that are modified according to the number and age of the children? Considering that teenage and pre-teen children seem to be the ones who suffer most from parents splitting up, this might make some sense.

    Polyamorous marriages? With clauses to define whether a partner is entering as hetero-, homo- or bisexual? (Think what implications that might have financially for two heterosexual men - or heterosexual women - sharing their wealth in such a marriage...)

    A whole new legal framework is needed. The introduction of civil partnership was a start. But tweaks to the existing institution of marriage are probably not the way forward...

    Report on 06 February 2013  |  Love thisLove  0 loves
  • Mr G
    Love rating 2
    Mr G said

    Tax breaks or not ? The Issue that needs to be sorted is the whole benefits system not just if the small crumbs from the tax system are shared out if you are married. You should not be better off on benefits than working. The rules need to be tightened and not allow people who have never contributed to be able to live there life off it, or come from another country and receive more then where they are from. The system needs to be changed as it is a growing debt for the whole country that is growing year on year who ever is in power ! who is paying for it ? Not the work shy who are given everything on a plate and moan that they are not getting enough. The workers who are working are paying for it all and what are they getting back ? not a lot ! We need to stop sending monies to other countries as well Now not in a couple of years, if they can stand on there own two feet then they should try, other wise they will be dependent on us forever ! We need to sort out our house before we spend away the next generation. There should be a fair system that if you contribute then you are intitled for a year to allow you to get back on your feet and not a life time.

    Report on 06 February 2013  |  Love thisLove  0 loves
  • sweetjj
    Love rating 7
    sweetjj said

    When I was employed I paid tax & NI the same as everybody else, no distinction was made that I was married.

    Once I was made I received Job Seekers Allowance (contributions based) for 6 months, after which time benefits were means tested, and it boiled down to "you are married your husband can support you".

    So we went from 2 incomes (with two personal allowances) supporting 2 adults & 2 children, to one income (with one personal allowance) supporting 2 adults & 2 children.

    That's why I'm in favour of being able to transfere personal allowances.

    As for it being a "married couples tax break" or a "civil partnership tax break" as someone stated previously, it is a clear definition.

    Report on 06 February 2013  |  Love thisLove  3 loves
  • ajrr1
    Love rating 19
    ajrr1 said

    I think Sweetjj hits the nail on the head. The goalposts are forever moving, which makes planning by individuals very difficult.

    I do feel for those who used the safety net for the right reasons and now have it pulled out from underneath them.

    Unfortunately when benefits are extended as far as they have been in the last few years, there will always be arbritary decisions made on what benefits to reduce/remove. Many people who are deserving will suffer, even though that was not the intent.

    Personally I don't think transferring personal allowances will make any real difference (even though rather selfishly I should be in favour) What they giveth with one hand they must taketh away with the other if they are committed to reducing the deficit.

    Report on 06 February 2013  |  Love thisLove  0 loves
  • silkycat
    Love rating 48
    silkycat said

    I agree with the basic concept of being able to transfer the alllowance from one partner to another. I think that the term "married couples" is a bit of a red herring and that the definition needs a wider interpretation. I also like the idea of child supporting disabled parent/partner or parent a child is a good idea. I think it could be a better way of targeting a benefit towards those who need it and should be allowed on the entire spouse/partner allowance. It may also allow govenrment to use a bit of smoke and mirrors to reduce the amount of money paid throufh the benefits system. An increase in icome as a result of transferring allowances could be clawed back by reduced tax credits or other benefits for example. As ajrr1 says don't expect govenment to give without taking elsewhere.

    Of course if you are a multi-millionaire with a mansion and a non working partner with no other income, you could benefit too!

    Report on 06 February 2013  |  Love thisLove  1 love
  • killick_becki
    Love rating 62
    killick_becki said

    It sounds like most of the comments are heading towards a "tax bil per household" approach. Why should we stop at allowing spouses to share tax allowances, throw the childrens' allowances in too!

    Of course, the admin for all of this is complicated and would probably be easier for each household / family unit to submit a tax return each year. Then get rid of PAYE completely as it would be completely wrong.

    Report on 06 February 2013  |  Love thisLove  0 loves
  • muffindell66
    Love rating 4
    muffindell66 said

    Must be thick, how can transferring £750 to your partner be worth just £150 in the pocket? SRT=20%,NI=11%, or roughly 1/3 is taken off by tax and NI, it just doesn't work out; please explain.

    Report on 06 February 2013  |  Love thisLove  0 loves
  • smithdom
    Love rating 33
    smithdom said

    I agree with the principle of transferable tax allowances, but not that it is linked to marriage. A marriage certificate is a poor indicator of a loving and committed relationship and should not be used as a criterion for tax advantage.

    A transferable tax allowance would allow one very important segment of society to be recognised financially where they are currently undervalued. A parent who chooses to stay at home to raise children plays a very important role in their upbringing, and this should be recognised. I'm not against both parents choosing to further their careers and use childcare, but they are rewarded with two incomes. Allowing a transferable tax allowance where a parent forgoes an income to raise children will provide some small financial compensation to that family.

    Report on 06 February 2013  |  Love thisLove  1 love
  • george sanders
    Love rating 2
    george sanders said

    I seem to remember that years ago, married couples had a tax break? Perhaps the government is not keen because it would mean that same sex couples would have the same privilege? Householders also had a mortgage tax break, which helped many to buy their own properties and this ceased under Mrs Thatcher's government. In those days, I seem to remember that the mortgage interest rate reached 14/15 percent and no one complained, they all paid without protest, despite the pain? What is different these days to make people think their mortgage repayments are incredibly high?

    Report on 06 February 2013  |  Love thisLove  0 loves
  • Moocher
    Love rating 7
    Moocher said

    So if I can't claim any of my wife's tax allowances when I am working, why is it that when I claim child benefits, or to that matter when I lose my job and try to claim any other government benefit, I have to declare her savings and income and it affects my benefits. Either we are independent of our spouses or we are not. But the Government wants its cake and to eat it.

    Report on 06 February 2013  |  Love thisLove  2 loves
  • muffindell66
    Love rating 4
    muffindell66 said

    I agree with Moocher in every way, it's soooooo true!

    Report on 06 February 2013  |  Love thisLove  0 loves
  • angela96
    Love rating 0
    angela96 said

    I used to claim married persons tax allowance in the 1980's when I was working and my husband was unemployed and the extra income was useful on my low wage. We are now in the same situation and I would love to be able to transfer some of my meager earnings to my husband to pay less tax and help support us both, if my wages were split equally between us we would pay no tax at all. I sometimes feel that on low incomes it is financially viable if either both of you work or neither of you work, especially if there are children, and it's wrong that this is the case.

    Report on 06 February 2013  |  Love thisLove  0 loves
  • GrannySandi
    Love rating 7
    GrannySandi said

    I was an easter bride in 1969. An advantage of our getting married on 5th April was we got a married couples tax rebate very useful for newlyweds.

    When we moved into our second house in February 1975 we sold our 'posh' Cortina (having previously only had 'bangers') to help finance the move, only for the interest rate to increase to 17.5% in that same week. We had already stretched ourselves to afford the new house and for a while things were extremely difficult.

    Report on 06 February 2013  |  Love thisLove  0 loves
  • simc
    Love rating 0
    simc said

    I strongly disagree with your article !!

    Report on 07 February 2013  |  Love thisLove  0 loves
  • superbrain
    Love rating 2
    superbrain said

    A silly post.

    The point of the tax break that Mr Fitzsimons hints at is to extend to stay-at-home spouses the tax allowance already enjoyed by their sisters who receive payment for the work that they do, thereby evening up their treatment to some extent. NB the stay-at-homes also work: they just don't make any money from it. There is every reason why the Government should introduce such a break - but it should be a full personal allowance & not a small share of one.

    Report on 07 February 2013  |  Love thisLove  0 loves
  • harburg
    Love rating 3
    harburg said

    I like the French system where I understand it is the household that is taxed.

    Each parent has an adult allowance,

    each child has half an adult allowance.

    Report on 08 February 2013  |  Love thisLove  0 loves
  • g1ng3rcat
    Love rating 12
    g1ng3rcat said

    I have mixed feelings on this subject.

    I think it's only fair that the household's income (rather than individuals within it) should be taxed.

    But can't agree with the idea of rewarding married people - as someone who would like to have been married but none of my ex partners including the father of my child ever bothered to ask me! - I find it hard to believe £150 extra per year would have persuaded them to propose to me, but nonetheless such policies contribute towards a stigma against people like me whereas the exes (who are now married because apparently their latter partners must have had some special magic powers that I didn't) get to bask in the glow of supposed respectability.

    Report on 03 December 2013  |  Love thisLove  0 loves

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