levels of earnings. For example, where both husband and wife earn over £15,400 there will be no change, but where only one partner works, earning over £15,400, tax will increase. Even where both work but one of them earns between £6,000 and £15,400, tax will increase. There will also be cases where tax decreases, particularly where one partner does not work but has unearned taxable income and they are currently taxed at 20%. However, such cases will be rare. The result, therefore, is that many thousands of taxpayers would be worse off under independent taxation, and this is officially recognised. That is why there is a delay, as it is not the intention to increase the tax take under the independent taxation regime.
The solution to this problem is seen to be ‘grandfathering’. This effectively means that for couples likely to be affected, their current allowances will remain the same, while any new taxable couples will immediately be independently taxed. This does not eliminate the tax effect, but it does spread it over a period of years. Just as the removal of mortgage interest relief has been spread over ten years, so the full introduction of independent taxation will take a similar period of time.
Just when equal taxation rights for wives and civil partners appears to have been achieved, the old adage of ‘be careful what you wish for’ raises its ugly head for those who fought for change. There will be a cost for many of us, although exactly how much remains to be seen. The price of the gradual erosion of the institution of marriage will have to be met, but having lived in a happily married relationship for over forty years, sadly it is not a price that I would personally chose to pay.
Feel all alone with your tax problems?
Is your Tax too complicated to handle? Do you Need help getting through the maze?
We guide you with a personal, professional service at a cost you can afford! Call Malcolm anytime to arrange a ‘free meeting’ to discuss your needs.
Accountancy and Tax Specialists Director : Malcolm Chambers BA Cpfa
Address: 4 Bagatelle Farm Close, St Saviour, Jersey. JE2 7SJ Tel: 01534 870023 mobile: 07797 750375
email:
malcolm@chambersaccounting.co.uk www.chambersaccountinglimited.co.uk
Meetings can be arranged in the evening or at weekends as client convenience is always a key principle.
20/20 - Finance Page 47
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