Minister hints at tax break for married couplesIain Duncan Smith calls for a level playing field

05 October 2011

married couple

Some couples could pay less tax if the rules change 

The Work and Pensions Secretary referred to possible changes to the tax system during a speech to the Conservative Party Conference which also touched on welfare reform. 

Tax and married couples

Mr Duncan Smith's speech was primarily concerned with welfare reform- and the proposals contained in the Welfare Reform Bill which is currently before Parliament, but he reminded his audience that: '...the Prime Minister has made it clear that in this Parliament the Government will recognise marriage in the tax system'. 

During the 2010 election campaign, Mr Duncan Smith's party proposed changing the rules on income tax to let couples transfer unused personal allowance, so that if one partner didn't use it all the other could use it to save on tax. The proposal was capped at £750 allowance however, which would have delivered a tax saving of just £150. 

At the time, it was made clear that this measure would also apply to Civil Partners and was primarily designed to promote social stability. The Coalition government has made no specific commitment to cut tax in this way, however. At the moment, personal allowance cannot be transferred.

Welfare reform measures      

The main part of the Work and Pensions Secretary's speech concerned reforms to the welfare system outlined in the Welfare Reform Bill. This proposes to replace a number of existing benefits with a universal payment. 

Mr Duncan Smith said: 'This isn’t about Government interfering in family life; it’s about Government recognising that stable two parent families are vital for the creation of a strong society. It’s about parents taking responsibility for their children. It is about government realising that we have to create a level playing field for the decisions people make about family. This means reversing the biases against stability we’ve seen in recent years, including the damaging financial discouragement to couple formation, despite the evidence of its stable outcomes for children.'

The speech alludes to the current discrepancy in benefits such as Employment and Support Allowance, whereby individual applicants receive £67.50 per week if they live alone but the lesser sum of £105.95 between two if they cohabit as a couple. 

Responding to Mr Duncan Smith's suggestion, the Shadow Work and Pensions Secretary, Liam Byrne said: 'Today’s speech from Iain Duncan Smith shows just how out of touch the Tories are with the challenges facing families and out of date with the reality of modern Britain.'

More on this... 

  • You can read more about income tax in our guide to income tax rates and allowances

  • If you are married your may also be entitled to a married couples allowance
  • You may also be entitled to other tax assistance such as tax credits