Yesterday I saw the news about the Child Benefit changes and thought of an instant reaction. However, I decided to leave it a bit and think about it before posting.
In the meantime, of course, the middle classes are in outcry (strangely it’s overshadowed the £500 pw maximum for all benefits), and the Mail and Telegraph have followed their readers in outrage.
So the Tories have added insult to injury and restated their intention to have transferable allowances for married couples, with the implicit idea that it would be extended to balance out the Child Benefit changes. Which is itself also a clumsy idea and isn’t immediately clearly fair.
Basically, single parents on over £44,000 will lose out the most. Married childless couples where one earns loads and the other doesn’t work at all will gain the most. In between will be all sorts of situations where whether you gain or lose will depend less on household income and more on how close you are to the ‘traditional family’ ideal.
The oddest thing is that Child Benefit will still be being paid to the same people as before. All that will happen is that people above and around the threshold for the 40% Income Tax band will have their PAYE code altered in all sorts of ways to claw the money back. And as we saw last month, HMRC doesn’t have any problems with the PAYE system.
Oh. Well, apart from all the problems they have with the PAYE system resulting in loads of over- and under- payments going back years.
I thought that the removal of the 10% band by Gordon Brown in his 2007 budget was cack-handed, but this is ridiculous.