George Osborne's plan to cut child benefit is
still mired in confusion just eleven weeks before it starts, with tax experts
warning the Government that they have left it too late to implement the reform
in time.
Photo: PA
HMRC is preparing to send letters to all high-earning taxpayers it
thinks will be affected by the change, which will see child benefit cut in
families where one parent earns over £50,000. Families where a parent earns
over £60,000 will lose the money completely. However the Institute of Chartered
Accountants in England and Wales (ICAEW) warned last night that time is running
out before the January 7 implementation of the cut. It said that most middle-class families remain oblivious to the changes,
which will require an estimated 500,000 people to fill out complicated
self-assessment tax returns for the first time.
Anita Monteith, technical manager at the ICAEW’s Tax Faculty, said that
the “ill-judged” policy will over-burden a tax system that is already “creaking
at the seams”. She said that “most people” do not know anything about the
changes and said that the potential for confusion is “very high”.
The cut in child benefit is being implemented by the Chancellor to
reduce the Government’s benefit bill. Currently 7.8 million families are given
the cash, which amounts to £20.30 a week for first child and £13.40 for others.
More than a million families will be affected by the policy. Ms Monteith said
that that the system could end in chaos because HMRC plans to ‘claw back’ the
money via people’s tax returns, rather than simply pay them less.
The move will require half a million people to fill out returns for the
first time, although families can avoid self-assessment if they give up child
benefit entirely, Ms Monteith said. People remain unaware of the policy, the
ICAEW argues. “Most people don’t know anything about it. January 7 is not far
away,” said Ms Monteith. She said that the tax system is already “creaking at
the seams” and staff numbers at HMRC are down due to departmental cutbacks from
central Government. “HMRC staff numbers have gone down from 96,000 to 66,000,
and trying to get through on the telephone is a very lengthy process now. I
don’t think it is the right time to bung in a whole bunch of people who have
never had to engage with self-assessment before, and be lumbering them with a
tax charge that is not intuitive,” she said.
One possible complication is that HMRC will write to householders who
earn over £50,000. However these are not necessarily the people to whom HMRC
pays the money on a weekly basis. This could mean that breadwinners will be
alerted to the changes but the people who carry out childcare duties might not
be. The ICAEW has written to MPs urging them to make people aware of the
changes. “Quite frankly if you have got 3 children under 5 or something and
your husband is out working every hour, quite possible you don’t read the
financial pages,” said Ms Monteith.
A spokesman for HMRC said: “We will be writing to all taxpayers
potentially affected by the changes later in the Autumn, when HMRC will set out
what people need to do and the options they have.” A Treasury spokesman
defended the cut to child benefits. “It is unfair to continue paying child
benefit to those on high incomes, and we are making the system fairer by
introducing the changes,” the spokesman said.
Telegraph UK
Please share
If some one wishes expert view on the topic of blogging after that i advise him/her to visit this web site, Keep up the nice work.
ReplyDeleteHere is my web site :: http://hoidtreatment.webs.com/apps/blog/show/13932365-interesting-facts-about-scalp-med
Thanks so much for this very encouraging comment. i really appreciate and am gingered to do more
Delete