Would tax-breaks help more couples tie the knot’?
Although families are to benefit from tax free childcare vouchers in this week’s budget, Chancellor George Osborne’s failure to implement tax breaks for married couples is seen as a ‘slap in the face’ for traditionalists in his party.
As Prime Minister, David Cameron often talks about the importance of family, so it could be argued that the introduction of tax-free childcare vouchers, which will be worth £1,200 per child, do demonstrate a commitment to helping those with children.
But what happened to the financial incentive for couples to tie the knot? The Chancellor’s decision to exclude the incentive has disappointed and frustrated many in his own party, particularly as a married couples’ tax break was promised in the Conservative manifesto. It would have enabled those in a marriage or civil partnership to transfer £750 of their tax-free personal allowance to their partner, reducing their partner’s tax bill. This would be worth £150 a year to basic-rate taxpayers.
The tax break issue is one that divides the coalition, with Deputy Prime Minister Nick Clegg insisting: “You don’t need the taxman to tell you whether you should get married or not.” Opposing the idea of tax breaks for couples who decide to marry, Mr Clegg has described the plan as a “1950s view“.
The Prime Minister has vowed to mend ‘broken Britain’ with the restoration of family values and says that he is ‘pro-commitment’, with marriage the key to a stable society. He has promised to put families at the heart of policy making.
Is the 1950s model so outdated? It could certainly be argued that the era had a greater air of permanence and stability about it than today’s culture of instant celebrity status and material trappings; divorce was far from common back then and carried a social stigma. It could also be said that social and financial pressures ensured couples stayed together regardless of how miserable they were.
Of course this was also prior to the Divorce Reform Act 1969, which came into force in 1971 and opened the floodgates to a completely new world where divorce petitions no longer had to be heard in the High Court and separation was much easier to achieve.
Race forward 40 years and divorce rates have soared. On the other hand we are living longer, healthier lives and some argue that the notion of staying with one partner for life is less valid than it once was. There’s no doubt that the passing of decades has seen a dramatic change but perhaps neither era has the perfect answer.
At Jones Myers we strive to remain non-judgmental. There is much to commend preservation of the family unit, but not at the expense of all else – especially the happiness and stability of any children involved. The number of cohabiting couples has increased to around 2.9 million and regular readers will know of our campaign for new legislation to give cohabiting couples similar protection to married couples in the event of a split.
There is speculation that the tax breaks for married will be introduced in the 2014 Budget, but regardless of marital status, our aim is to ensure that couples who genuinely cannot see a future for their relationship are given every opportunity to resolve their problems and difficulties in as fair and amicable a manner as possible, for the good of all involved.