Who stands to benefit from a transferable tax allowance?

Posted in: Family Finance

Who stands to benefit from transferable tax allowance?

As reported in This is Money in September 2013.

The article explains that only a small proportion of the caregiving partner’s non taxable allowance will be transferable to the working partner. 

MAHM asks WHY SUCH A SMALL PERCENTAGE?  It will mean that couples eligible will only be better off by about £200 per year !   Why can’t the whole non taxable allowance be transferred?

Granted, the principle of a transferable allowance is important (although we prefer Income Splitting for Families with Care Responsibilities) , but when compared to the subsidies given to couples using childcare,  and view the fact that dual earning couples are already paying far less tax (and on the same household income are far more likely to have retained their child benefit)  it is a pittance.   The government refuses to acknowledge that a second adult at home caring for family members has ‘costs’  in care.   He or she has forfeited his/her entire salary to provide care, saving the state millions in replacement registered care  – it’s worth noting that the childcare/early years sector is massively subsidised to the tune of about £7 billion in the UK.  

Loss of income/career prospects/pension rights/ability to get a mortgage (etc) is a huge sacrifice to make, but most parents caring for children would say it’s worth the stresses and struggles they experience because, at the end of the day,  someone is available to provide one-to-one care for their baby and/or  young children, as well as for teenagers who need the support of a parent who can be available to them in tough times, rather than coming back to an empty house and no-one to talk to.   Elderly relatives also need support,  and this is less likely to be possible if both parents work outside the home.

Send your views to info@mothersathomematter.org



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