Allow households to combine personal income tax thresholds

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Allow households to combine personal income tax thresholds

Petition Details

Allow households to choose whether to opt for taxation using personal thresholds or 'family thresholds', where personal thresholds are combined, as families with one higher rate earner pay tax at a higher rate even if their overall income would be within a combined standard rate tax threshold.

Additional Information

Families can be taxed more as a household because an individual may have a higher salary, for example:

Family 1 has 2 parents, 1 earning £8,000 a year and another earning £60,000. Family 2 has 2 parents, both on £35,000 a year.

Family 1 does not benefit from Child Benefit payments as they are deemed to earn too much, and have almost £10,000 taxed at the higher rate tax, whereas family 2 are able to fully benefit from Child Benefit and pay less in tax than family 1 but have a higher gross annual income.

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