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.