What is “unenforceable” about child benefit cut?
Iain Martin has a great scoop this morning, quoting a Treasury source as saying that the Government’s plan to abolish child benefit for households with a higher-rate income tax payer is “unenforceable”, and predicting that it will be ditched before its scheduled introduction in 2013.
If it is not too early for a backlash against the backlash, I wonder if it is as difficult as all that.
The key problem is alleged to be this:
How can the government easily prove the connection between mothers … and the higher rate taxpayer she might live with? And then keep tabs on the situation on a monthly basis for almost two decades — with millions of taxpayers involved (moving in and out of work, having new children, some separating, getting divorced, finding new partners who may or may not be higher rate taxpayers, etc).
It’s easier to stop the mother getting the benefit if she herself is a higher rate taxpayer. It could be done via her tax code. But if she’s not, how good will the government be at establishing whether she is living with a partner paying tax at 40%?
The basic mechanism is simple: the mother will be required to declare whether she is living with someone paying higher-rate tax. It could be one question, answerable with a single tick, in an annual tax return. I would have thought that most people would answer it honestly, not wanting to be prosecuted for a criminal offence that would be no harder to detect and enforce than most benefit fraud.
If this simple question of public administration is causing “panic” in the Treasury, then it must be time to recruit some public servants capable of delivering reform.
Photograph: Andrew Winning / ReutersTagged in: child benefit, george osborne, public service reform
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