How David Cameron’s marriage tax breaks affect you

According to the Prime Minister, around 4 million married couples will benefit from new tax allowances from 2015. David Cameron stated there are plans that will mean couples will be around £200 a year better off. The way this will work is that from April 2015, if neither of the couple pay the higher rate of tax, they will be able to transfer £1,000 of their tax-free allowance to their spouse. So in essence, if you are married and you both pay the basic rate of tax, and one of you does not use up all your allowance, the other person can ‘claim’ some of it.

David & Samantha Cameron © Chris Uncle/Flickr

David & Samantha Cameron © Chris Uncle/Flickr

But a spokesperson for Labour said that Mr Cameron was “out of touch” if he thought the people would get married “for £3.85 a week”.

The Prime Minister announced the tax break plans for married couples (which also by the way, includes the 15,000 couples who entered into a civil partnership) soon after the Liberal Democrats put forward their plans for free school dinners for children under the age of 8 years old.

So what does it mean in monetary figures? Well, you pay a basic tax rate of 20% for up to £32,010 of taxable income. So, to be eligible for the married tax benefit, you would have to earn under £41,451 a year. And although the tax breaks would start in April 2015, people would not start to see the benefits in real financial terms until the end of that tax year, in 2016.

David Cameron spoke about his passion for the institution of marriage in the Daily Mail: “I believe in marriage. Alongside the birth of my children, my wedding was the happiest day of my life. Since then, Samantha and I have been a team. Nothing I’ve done since – becoming a Member of Parliament, leader of my party or prime minister – would have been possible without her. There is something special about marriage: it’s a declaration of commitment, responsibility and stability that helps to bind families. The values of marriage are give and take, support and sacrifice – values that we need more of in this country.”

And he then went on to clarify, by tweeting, that the tax break for was all types of people who were married: “The £1000 marriage tax allowance will apply to straight and gay couples, as well as civil partners. Love is love, commitment is commitment.”

However, Labour’s Shadow Chief Secretary to the Treasury Rachel Reeves thinks that the whole tax break is a drop in the ocean: “David Cameron’s so-called marriage tax break won’t even help two-thirds of married couples, let alone millions of people who are separated, widowed or divorced. He’s so out of touch he thinks people will get married for £3.85 a week. And even for the minority who might benefit, it will be far outweighed by what David Cameron’s government has already taken away in higher VAT and cuts to child benefit and tax credits.”

The Conservative Health Secretary Jeremy Hunt disagreed: “This is a measure that’s going to help four million hardworking couples where life is pretty tough. This is going to go to lower earning couples, incidentally, it’s not going to go to everyone. And I hope it will make a small difference but also send a signal that even though marriage is not for everyone, and there are many different shapes and sizes, different types of families, we recognise the value of this institution to our society.”

But it appears that not every Tory MP thinks that marriage is the only institution that should receive tax breaks, as the Conservative MP for South Suffolk, Tim Yeo, explained to BBC Radio Suffolk that marriage “is not the only model for a family”. Yeo added: “I don’t see why, for example, someone who has been widowed, whether it’s a man or a woman, at a young age, and is trying to bring up children perhaps on a relatively low-income, I regret the fact that the current proposal may exclude those people.”

For those interested in finding out more on the marriage tax breaks, the Conservative Party conference takes place in Manchester from Sunday, with the final keynote speech by the Prime Minister taking place on Wednesday.

*Featured Image copyright Everything Birmingham/Flickr

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