A conservative think tank has proposed a £5,000 Parental Allowance, urging the Department for Work and Pensions (DWP) and HMRC to consider it. Onwards has joined parenting platform Mumsnet to suggest offering a £5,000 tax break.
HMRC Urged to Consider £5,000 Parental Allowance Proposal
The study suggests introducing a £5,000 child tax allowance, which could help 12.6 million working parents save around £2,000 per year, as reported by the Birmingham Live.
It recommends the initiation of a new tax-free earnings allowance designed specifically for parents, which would keep the Personal Allowance for most workers at £12,570 but raise it to £17,570 for parents.
Onwards had stated that the government should get inspired by other countries like France, which has a supportive tax policy for families.
Parenting Platform and Think Tank Highlight Financial Barriers and Tax Proposals
Justine Roberts, founder and chief executive of Mumsnet, remarked: “Whether or not to have children is a deeply personal decision, but it's one that's often influenced by financial factors. We know from the millions of conversations on Mumsnet that high childcare costs, the housing crisis, and the effect of the 'motherhood penalty' on women's careers all pose barriers to parenthood in the UK.
“This report is an important contribution to the conversation about how we tackle the financial barriers to parenthood, and reflects much of what we hear from our nine million users, particularly around low rates of statutory maternity and paternity pay, the effect of the high income benefit charge, and the importance of tackling the 'motherhood penalty' in the workplace.”
Phoebe Arslanagic-Little, who leads the New Deal for Parents at Onward, stated: “Our tax system fails to recognise either the particular financial burdens upon parents, or the tremendous contribution parents make by having and raising children.
“Britain is unusual among developed countries in its failure to support families through the tax system and this contributes to the financial barriers to parenthood the British people face.” They said: “Better supporting young families through a new child tax allowance will support people to have the families they want, of whatever shape and size, while simultaneously helping us to avert the negative socioeconomic effects of ageing society.”
