Taxpayers 'will be fined' for child benefit breach

Higher rate taxpayers who fail to declare that their partners are claiming child benefit will be fined under planned welfare reforms, it was disclosed today.

Legislation will require those earning more than about £42,000 a year to inform HM Revenue and Customs if anybody in their household is claiming the benefit.



The Treasury said that non-disclosure would be breaking the law and result in "penalties".



There have been claims that the withdrawal of child benefit from households with a higher rate taxpayer is unenforceable.



Claimants - usually mothers - will be expected to stop drawing the money if they or their partners are on 40% tax. The threshold for that will be about £42,000 from next April.



A Treasury spokesman today insisted the change would go ahead from 2013 as announced by Chancellor George Osborne.



"In line with the administration of tax, HMRC will take action in cases of non disclosure of information which is relevant to a person's tax affairs," he said.



"This will include the issuing of penalties.



"As we said at the time, the Government will bring forward legislation to implement this change in due course."



A senior Tory MP warned earlier that the proposed shake-up would be "virtually unenforceable".



Ian Liddell-Grainger, chairman of the all-party parliamentary group on taxation, said the move would be impractical until HMRC was able to process real-time information.



"One of the big difficulties the Government has got is that the system they have got is not a real-time system and therefore this is going to be virtually unenforceable," he told BBC Radio 4's Today programme.



"Until we go to real time taxation this is going to be a very difficult position."



He added: "If your circumstances change they will not be able to enact it in real time. The ramifications for getting it wrong are enormous for the taxpayers and the citizens of the UK.



"Why is the citizen going to volunteer the information? Because it's not going to be worth their while, there's no guarantee it can be enacted and people want their privacy respected."



But the Treasury spokesman said: "This is nonsense, the withdrawal of child benefit for higher rate taxpayers will be enforceable and will go ahead in 2013.



"The Office for Budget Responsibility has scrutinised all of the assumptions underlying the savings from this measure, including compliance."













Prime Minister David Cameron said he did not foresee any problem with compliance.



"What we said at the time was that it would be a very simple approach which is to say that if there's a higher-rate taxpayer in the family you don't get child benefit," he said when quizzed over the fines policy at a post-EU summit press conference in Brussels.



"Now I don't start from the proposition that we are all appalling cheats and liars and tax evaders and the rest of it and I am quite sure this change will secure the very generous revenues that the Office of Budget Responsibility have pencilled in.



"So I do not predict a problem."

















Shadow chancellor Alan Johnson today wrote to Mr Osborne calling for an end to the "significant confusion" surrounding who would be hit by the measure.

Would a single mother have to spend a certain number of nights with a new partner before his tax status meant she lost her right to child benefit, Mr Johnson asked.



"Would she have to keep a record of the number of nights she stayed with him? Would the answer vary if the nights were spent in her property or his?" he went on.



There were many other potential anomalies, he suggested, asking whether the cut would affect:



:: A mother of two whose older child becomes a higher-rate taxpayer while living at home;



:: A single mother who moves back in with her parents - one of whom earns above the threshold or with a sister whose husband pays higher rate tax;



:: A daughter whose higher-rate paying mother moved in with her and her husband.



In the latter case, would the grandmother be fined if the daughter continued to claim, he asked.



"I understand that HMT said yesterday that those who did not self-certify themselves as ineligible would be 'fined'. Could you confirm that even in cases where an individual is not certain whether they are eligible to continue receiving child benefit or not, and does so to avoid losing out, that person may still be fined?" he went on.



"We already knew that your plans were unfair. But what has been increasingly clear is that the plans simply haven't been thought through. The result is the significant confusion we are now seeing about what this policy means in practice.



"The public are entitled to some straight answers about who will be affected and how the change will be enforced."



Mr Johnson also pledged that Labour would oppose in Parliament any legislation needed to implement the enforcement regime.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Operations Manager

£45000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Panel & Cabinet Wireman

£20000 per annum: Recruitment Genius: Panel Wireman required for small electro...

Recruitment Genius: Electronics Test Engineer

£25000 - £27000 per annum: Recruitment Genius: An SME based in East Cheshire, ...

Recruitment Genius: Marketing Assistant

£18000 - £22000 per annum: Recruitment Genius: Do you have previous experience...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015