Ah, those clever Tories, eh? They certainly know how to run a country. When the came up with the idea to ‘remove’ Child Benefit from higher rate taxpayers, the question was how? It soon became clear that what was actually going to happen was that they wanted to reduce the tax threshold for higher rate taxpayers who were parents in receipt of CB to recoup the money.
This led to further simple questions about how it would work, such as how you can tell without having full details of who was living with who, what happened if both parents were higher rate taxpayers, how people who were on the borderline would be dealt with if it takes a while to get tax returns in…
Seems that one way to deal with these pesky questions is to write a letter to every higher-rate taxpayer to ask them if they or their partner receives Child Benefit. Apparently if you don’t ‘fess up, you can be fined, but having to write to 4 million people suggests that they don’t actually know who to go after. Something tells me this policy is dissolving into farce already.
It would have been far simpler to either increase tax for all higher-rate payers (to avoid changing the 40% rate, simply reduce the threshold a bit), or to change CB by including it into the Tax Credits system. But no, the Tories had to make a headline announcement during Conference, and so a stupid idea was born.
October 29, 2010 at 17:48
Its even worse than that.
Child Benefit is paid to a mother. She doesn’t have to tell her husband, partner or anybody else whether she is claiming it or not.
A man doesn’t have to tell his wife/partner how much he earns.
OK, most couples don’t keep these things secret, but some do, and maybe some of them have a good reason to. Anybody else can just say, plausibly, that they don’t know and their other half won’t tell them.
The only way out is to put in a law forcing individuals to disclose everything to their partner, or have a nice big intrusive database to match tax declarations to child benefits, via addresses and all sorts of other things.
Without something more or less the same as the national database behind the ID cards they just have to take everyone’s word for it, or spend a fortune investigating and checking everything.
It would have been easier to just make Vodafone pay their tax.
October 30, 2010 at 11:29
Actually, benefit can be paid to either partner. Not really the point I know but just being pedantic 😉
I think everybody knows that this is a ridiculous idea anyway, hopefully when they try to push through the housing benefit thing, some of the lib dems will actually stand up and block it and they’ll be forced to think again about this too.