The Trad Tax


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calculator, tax. accounts
John Cavalier
Written by John

19 min read

I want to caveat this article right from the get-go. Whilst I am a CCAB-qualified accountant, and studied the UK tax and accountancy framework as part of my qualification, I am not a tax specialist and nothing that I outline below should be taken in any way as being financial advice. What follows is simply an exploration (that I acknowledge may be incomplete), of elements of the current tax regime and how we might view those elements through a conservative (small c intentional) lens. What follows is a glimpse in to the horribly structured world of the UK tax system, please bear with the technical explanations, and try not to get too bogged down in them.

What I intend to do is to outline some of the disincentives inherent within the existing tax code, which act to disproportionately penalise 'traditional' families with a higher burden of income tax and National Insurance through PAYE than they might otherwise experience in non-traditional, though more commonly encountered, families in the 21st century. I will also consider some of the ‘benefits’ that may, or may not, be available in the scenarios covered which are ostensibly intended to incentivise the creation of families.

For the purposes of this article I will use the following definitions for the terms ‘traditional family’ and ‘non-traditional family’ throughout:

Traditional family: two adults (typically male and female, though this is not strictly relevant for this discussion) where one is in full-time employment and the other is not (either they work part time or not at all), electing instead to prioritise other activities including (but not limited to) the raising of any number of children.

Non-traditional family: two adults (typically male and female, though this is not strictly relevant for this discussion) where both are in full-time employment, electing to outsource the raising of any number of children to others.

Please note that when making the distinction between ‘traditional’ and ‘non-traditional’ I am referring strictly to the way in which the financial requirements of each type of family is met, not to how the family unit is constituted.

Income Tax

HMRC defines ‘income tax’ as ‘a tax you pay on income’. Thanks HMRC.

Income tax is not paid on all types of income, and there are various exemptions. For our purpose, income tax is paid on all money obtained through employment. In the UK we have what is known as a ‘progressive’ income tax which means that the more you earn, the greater proportion of tax you pay, conversely, the less you earn, the lower your tax bill will be. produces a handy diagram visualising this:

Under the UK tax regime there are effectively four different rates of taxation incurred at various income thresholds. Currently these are as follows:

Personal AllowanceUp to £12,5700%
Basic rate£12,571 - £50,27020%
Higher rate£50,271 - £150,00040%
Additional rateOver 150,00145%

In theory this means that a person earning £15,000 per year would pay £486 (12570@0%, 2430@20%) in income tax, an effective rate of 3.24% (486 / 15,000). Someone earning £200,000 per year would be liable for £69,932 of income tax (12570@0%, 37,700@20%, 99,730@40% and 50,000@45%), an effective rate of 34.97%. HOWEVER HMRC likes to complicate this by having a threshold at which an individual is no longer eligible for the personal allowance (on incomes between £100,000 and £125,140), at which point the allowance received tapers to nil and a higher marginal rate is therefore exacted. Therefore, in reality, the amount of tax due is higher, as is the effective tax rate. There are various ways and means that these bands can also be extended, such as through gift aid payments.

Due to the relative complexity of all these interactions, and recognising that the audience for this article is not expected to have an in depth knowledge of the UK tax code, I will keep it simple in the examples I outline below by sticking to individual incomes below £100,000 which are, by far, the most commonly encountered salaries in the UK (the average being around £31,500 and the median, or most common, being around £26,000 as at the start of 2022).

National Insurance 

In addition to income tax, the other form of taxation (which is in theory not a tax at all but an insurance) most commonly encountered by an individual is National Insurance. According to HMRC, National Insurance is notionally (my own interjection) levied to contribute to a range of benefits, including the state pension, and an employee who meets certain criteria will be expected to make National Insurance contributions throughout the course of their employment until the end of the year in which they reach state pension age (currently 68).

As you can probably tell, I don’t consider National Insurance to be an insurance or a pension contribution. It does not operate like an insurance or a pension contribution. NI is a tax on deemed working age people which is pooled with all other income for HMRC and spent according to the budget as outlined by the chancellor. There is no ring fencing and pension contributions (for example) are not put aside in any kind of pension fund, as one might be familiar with from any private or workplace pension scheme.

National insurance is divided among a number of ‘classes’ depending on your employment status. For our purposes we will consider only class 1 NI, the class paid by employees, which is separated, effectively, into three bands as follows:

nilUp to £823 a month0%
lower£823 - £4,189 a month13.25%* 
upperOver £4,189 a month3.25%

*previously 12%, thanks Rishi.

Crunching some numbers, a person earning £15,000 per year will pay £679 (£9,876@0%, £5124@13.25%), a 6.53% effective rate, and a person earning £60,000 per year will pay £5668 (£9,876@0%, 40,392@13.25%, £9,732@3.25%) an effective rate of 9.44%.

Putting the effective rate for incomes up to £100,000 on a graph produces something slightly different to that of a progressive tax (see above). Whilst it is somewhat ‘progressive’ up to the maximum earnings encompassed by the lower threshold (that is to say the more you earn, the higher your effective tax rate is), for those earning above this ‘lower band’, the more they earn (and therefore pay in NI), the lower their effective tax rate then becomes due to the higher band being liable to a lesser % charge.

The Trad Tax

So what is the ‘trad tax’? No, the Conservatives haven’t come up with a new way to pick your pocket while pretending to be the party of low taxation. What I am talking about is the existing effective tax rate suffered by people who live a ‘traditional’ lifestyle. Let’s put some numbers to this so that you can see the magnitude.

We’re going to work with two couples, let’s call them couple 1 and couple 2.

Couple 1 is ‘trad’, they have decided to apply the economic principle of the division of labour to their family unit, reasoning that they can cover more ground between the two of them if each person specialises. One puts career above everything and the other puts the home above everything.

Couple 2 is ‘non-trad’, they are both working, both taking on their ‘share’ of household chores etc. They divide everything down the middle, 50:50.

For the sake of this example, let’s assume that each person in couple 2 is earning the median wage and that couple 1 has the same income as couple 2 but earned by a single individual.

Scenario 1C1aC1bC2aC2b
Income Tax    
Zero rate (£12,579 @0%)Used in fullLost/wastedUsed in fullUsed in full
Zero rateUsed in fullLost/wastedUsed in fullUsed in full
Total Tax£18,393.80 £6,648.85£6,648.85
Income Net tax£44,606.20 £24,851.15£24,851.15
Total C1 income£63,000.00   
Total C1 income (net)£44,606.20   
Effective tax rate of C129.2%   
Total C2 income£63,000.00   
Total C2 income (net)£49,702.30   
Effective tax rate of C221.1%   
Trad Tax suffered by C1£5,096.10   

Because of the ‘progressive’ nature of the tax system, couple 1, our traditional couple, face an artificial penalty to structuring their life in this way of over £5,000. In order for our trad couple to have the same net income as couple 2, the working partner would have to earn an additional £9,000, a total of £72,000, just to break even with the couple who both choose to work.

Now let’s look at scenario 2. Let us assume that we are a few years in to the future and both couples have decided to get married and both have likewise elected to have children (let’s imagine they each have the perfect nuclear family - 2 adults, and 2 children) but that all other factors remain the same:

Scenario 2C1aC1bC2aC2b
Income Tax£12,628.40£Nil£3,784.20£3784.20
Total Tax£18,393.80£Nil£6,648.85£6,648.85
Income Net tax£44,606.20£Nil£24,851.15£24,851.15
Child benefit£Nil£Nil£1,885.00£Nil
Total C1 income£63,000.00   
Total C1 income (net)£44,606.20   
Effective tax rate of C129.2%   
Total C2 income£63,000.00   
Total C2 income (net)£51,587.30   
Effective tax rate of C218.1%   
Trad Tax suffered by C1£6,981.10   

By electing to add to their family, couple 1 have lost out financially even further. Because the working person in couple 1 earns above £60,000, their family is not entitled to any child benefit at all, whereas couple 2 are entitled to it in full for both children because neither earns above £50,000 (there is a taper between £50,0000 and £60,000). Couple 1 may still claim it (and they should because it provides NI credits to the non-working partner) but if they do claim it, then the working partner would have to complete a self-assessment which would result in an adjusted tax code such that the child benefit was reclaimed in full by HMRC (I have simplified the above by not representing this effect, the net result on finances is the same as shown). Currently the rules allow a family with 2 adults both earning £50,000 each (£100,000 total household income) to receive full child benefit whilst a couple with a single income of £60,000 would receive nothing which seems perverse.

As a result, the effective tax rate suffered by couple 2 is reduced further, as compared to couple 1, because they have a portion of their tax costs offset by the benefit they receive from HMRC. As a result, the trad tax (being the difference between the net income of couple 1 and couple 2) has now increased by £1,885 to £6,981.10.

Unfortunately couple 1 don’t even benefit from the marriage allowance, a tax relief that is available to all couples in marriages or civil partnerships which allows one partner to transfer 10% of their personal allowance to the other partner provided that the person making the transfer does not also use their personal allowance in full. This would amount to a tax saving per annum of a whopping £251.40 (12570*10%*20%) but because the working partner's income exceeds the basic rate level of taxation, he is not able to be in receipt of this transfer. 

It gets worse of course. Let’s say that couple 1 is really trad and they elect to home educate their children whereas couple 2 are unable to do so as they both work full time and instead make use of state schools. On a per pupil basis, the funding provided to schools for 5-16 year olds in 2022/23 is expected to be £6,970. This means that couple 1 is saving the taxpayer £13,940 per year by electing to educate their 2 children themselves, entirely at their own expense as there is no form of rebate or support for home educating.  

Meanwhile, couple 2, for the period of time that their children are enrolled in the state schooling system, is paying less in tax and NI (£11,412.70 total tax vs £13,940 schooling costs) than they are receiving as a benefit in the form of education for their children. If we assume that the real cost of that education is indeed the state funding of £6,970 per pupil, then the trad tax suffered by couple 1 in scenario 2 rises to £20,921.10.

This is a phenomenal sum given the examples provided, but what does this all mean?

Incentives Matter

It means that families are being nudged by the government, whether they understand this or not, toward embracing a more ‘modern’ lifestyle which sacrifices specialisation and traditional parental roles in favour of total employment. Without realising it, couples have significant incentives to embrace the 9-5 grind and entrust the raising of their children to complete strangers, so-called ‘professionals’.

In 1971 the female employment rate for those aged between 16 and 64 was 52.7%, in 2021 this had risen to 72.2%. This could be put down to progress: removing barriers and empowering women to be in the workplace and improving the lot of the sisterhood, but the reality is that when asked, one third of working mothers said that they would rather be at home raising their children than working, citing finances as the main reason why they are not.

When we work through the above examples, it is easy to see why this is so. There are huge incentives to eschew what, in any economical equation, free from government intervention,  would make perfect sense - the familial division of labour. The tax system of the UK, either through malice or lack of foresight, acts to subvert evolutionary engineering, to break the bonds of the traditional family, and it does this under the guise of fairness, equality and empowerment, regardless of what people say they would prefer.

Whilst writing this article, I was also reading Peter Hitchen's ‘The Rage Against God’. In one particular paragraph he wrote the following on the Soviet Union:

Once the baby was home, married life quickly included the state as a third parent, since salaries were carefully set so that it took two wages to pay for the basics of life. It was virtually unknown for any mother to stay at home to look after her children, who were placed very early in slovenly nursaries where they rarely died of the neglect they received, but were even more rarely given anything resembling a Western mother's loving attention.

And I couldn't help but wonder if the tax policies I have outlined above were intended to achieve a similar end as in Soviet Russia, albeit via slightly different means. Ultimately it becomes un-economical to behave as a traditional family might otherwise elect to do, thereby ensuring the state gains maximum access to the children of the family. They offer care for your child, at your expense and that enables them to teach what they would teach, in the manner they would teach it, without the interferring parents to disagree.

I call on any conservative government worthy of the name to reflect upon the way in which it currently favours total employment, at any cost, over and above the traditional family unit. I ask that if they are not willing to actively incentivise these traditional family units, then they at least remove some of the disincentives which currently exist as a result of our ‘progressive’ system.  

There are three proposals I would suggest that could be implemented:

  • Expand the marriage allowance relief to permit the full transference of any unused personal allowance between spouses.
  • Amend the child benefit rules to reflect household earnings rather than those of the highest earner only.
  • Provide some form of remittance to home educators to reflect the reduced burden they have upon public funds.

Whilst this would not completely remove the ‘trad tax’, the implementation of any, or all, of the above suggestions would go some way to reducing the disproportionate tax burden faced by families attempting to live a lifestyle that was considered the ideal as little as half a century ago. 

At the time of writing (10/05/2022) Prince Charles has just delivered the Queen’s speech for the opening of the current session of parliament. In it He outlined the proposed objectives of the government in this session. His opening sentence read as follows:

“My Government’s priority is to grow and strengthen the economy and help ease the cost of living for families

If the government truly wants to deliver on this pledge to ease the cost of living for families then it must take action to reduce this artificial burden which they have elected to place upon traditional families.

If you have managed to make it this far, past all of the technical gibberish, and, like me, were shocked by the scale of this hidden tax on the traditional family, then please consider contacting your MP and drawing their attention to this article. Ask what their opinion is and enquire as to whether they will raise this issue in parliament.

Your letter might read as follows:


Dear [insert MP name here]

I am writing to you today to draw your attention to the following article by the Wellington Project ( which highlights the unseen tax faced by traditional families. I am concerned that the disincentives posed by the current tax system to the traditional family unit, as defined in the article, are contributing to a lack of cohesion within society and I would like to see this addressed, particularly in light of the commitments made as part of the Queen's speech, delivered by Prince Charles, dated 10/05/2022.

Please can you outline your opinion on the matter so that I can understand whether your interests align with my own. This will enable me to make an informed decision on who I lend my support to at future elections.

If, like me, you are concerned by this anti-family and thoroughly unconservative ‘tax’ then please would you consider raising this issue in parliament and with your colleagues at the treasury on my behalf? 

I await your response.


[insert your name here]

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