'Train wreck' child benefit tax gets rolling

Thousands of parents are expected to receive letters from HMRC this month outlining changes to the way child benefit is claimed, including details of the new claw-back charge for higher earners.

The new system, to be introduced from 7 January 2013, will impose the so-called high income child benefit tax charge (HICBC) on equivalent to 1% of the benefit received for every £100 of income on those earning between £50,000 and £60,000. 

Since the measure was announced in the Budget AccountingWEB members including Rebecca Benneyworth have criticised the new child benefit rules for being too complicated and unfair.

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Comments
carnmores's picture

they complicate things because they want too

carnmores | | Permalink

it could have been so simple

k.bonney2's picture

Votes

k.bonney2 | | Permalink

At the end of the day it's all about votes.

Yes, doing it this way is a complete dog's breakfast and a few hundred thousand voters get angry.

Withdrawing child benefit and beefing up child tax credits would have been the sensible thing to do but can you imagine the consequences at the ballot box?

It's all about votes.

 

 

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ireallyshouldkn... | | Permalink

Just what scarce HMRC resources ought to be directed towards. 

A yucky system mangling historic looking tax returns and the payment of a current benefit that HMRC have effectively zero control over so long as the claiment is the lower earner, which being sexist for the moment is more often than not the case given it tends to be mothers who downgrade their hours and careers for the kids and mothers who claim the benefit. 

 

I think pulling out child

WilmaQ | | Permalink

I think pulling out child benefit and beefing up child tax credits would have been the sensible thing to do but can you really imagine the consequences at the ballot box?We have to think first before we amend the system.That point is a lifetime understanding for financial literacy and cash management.Read more here