Institute piles into child benefit fiasco

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The ICAEW has gone on the attack over proposed changes to child benefit, calling it a “policy disaster” which is in danger of becoming an “operational and reputational disaster” when it becomes law.

It told the Treasury in a confidential briefing document, as revealed by The Telegraph, that the plan to deny the benefit to families with a high earner “is seriously flawed in principle and in practice”.

Chief executive Michael Izza said in his blog that their concern came out of the ICAEW’s “public interest role”, which is to help ensure the tax system works fairly and effectively.

With a growing number of concerns and pressures from its members, the institute had to “set down a marker” in response to this “complete administrative nightmare”, according to Frank Haskew, head of the Tax Faculty at the ICAEW.

Haskew told AccountingWEB: 

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About Robert Lovell

Business and finance journalist


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    16th May 2012 11:30

    The trouble with our tax system...

    The trouble with our tax system is that it is becoming more and more like the Ptolemaic system in astronomy, with epicycles being added to epicycles. What we need is a new Copernicus to simplify the whole regime.

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    16th May 2012 11:45

    Child benefit and higher rate tax

    A system whereby one party gets the benefit and another party gets a tax bill, a system where one party is asked to disclose information about another, a system that generates an extra half-a-million tax returns, a system that steps into the potentially explosive topic of money between husbands and wives/partners - where was the Office of Tax Simplification the day this one was dreamed up?

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    16th May 2012 11:55


    This is again an attack on rights by Govt and as usual poorly thought out. Consider these two scenarios.

    Couple married both have prior failed marriages both produced children, Husband earnes over 60,000 has no parental responsibility for step children, yet thier mother, his wife, who has all the parental responsibility has child benefit stopped. His children live with ex wife who receives the benefit as her new husband earns less than 50K.

    Co habiting couple, mother earns 50,000, partner earns 150,000, he works overseas and is non resident for UK tax, retain child benefit.


    Another thought which I will throw in the pot. The basic requirement for claiming maintenance under CSA regulations is that the child is an eligible child for child benefit. If this benefit stops does the absent parents liability to child maintenance stop also?

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    16th May 2012 12:23

    The trouble with our (not just) tax system !

    I think that the whole system by which this country is run needs to be looked at.

    Unfortunately there does not appear to be anyone in government (or opposition for that matter) who has a fixed core of principles which can be used as the basis from which to start the overhaul. If you have a "fixed core" then at least you can decide on whose views you agree with and vote accordingly. Policies should reflect those core principles and people should be made aware that achieving these principles will not happen overnight - in many cases it could take more years than a term or two of a government - but if people understand the "core" maybe they will be more likely to accept that some of the changes being made may, in the short term, have an adverse effect on certain groups of the population. 

    Everything appears to be carried out under "knee-jerk" conditions - changes are made; there is uproar from the masses; policies are rethought on the hoof to try and keep the population, if not happy, at least onside enough so todays politicians can remain in power.

    Everything is done for the short term and everyone wants to keep their "own" people in clover - there is very little thought for the good of this country as a whole - but then again it isn't politically correct these days to be proud of being British.



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    16th May 2012 13:26

    I think that the whole system by which this country is run

    Totally agree, once elected MPs will do all sorts to keep their job, you only need to look at what the Leverson enquiry has exposed. To maintain the "old boys club" check out the number of parachute canditates. They all look at the short term which is why we have the financial crisis now. But that is another debate.

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