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 / Reuters

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• bugedone

  Errr, so what if she doesn’t fill in an annual tax return? Most people don’t you know, they rely on PAYE. And that assumes they even have any earnings. Surely many of the target mothers will be stay-at-home mums with a high-earning partner.

  Now, it would be relatively easy to track down married couples, but for unmarried couples, and step-parents (where parental responsibility need not lie with the higher-rate tax payer and thus maybe the mother should still get her child benefit) it might prove harder. But surely that would be ‘recognising marriage in the tax system’ the wrong way round.

• http://pulse.yahoo.com/_7PZFDKKEPTZH6NWTRNF7BIOXZI Toni Roome

  As others have pointed out many higher rate tax payers don’t get a tax return. I’m a HRT and although I have had tax returns in the past I haven’t for the last 18 years even though I now have 3 PAYE incomes (2 of which are pensions).On the other hand we do already have a tax credit system run by HMRC that is based on household rather than personal income, though it also seems to have its problems.

• http://www.facebook.com/profile.php?id=1185680962 Tom Halpin

  The benefits system relies on people telling the truth. So does the tax system. It’s the fear of an investigation and it’s consequences that keep a lot of people honest.
  Most mothers live with the father of their children. Surely its not too much to ask the father of the children who are being claimed for are they higher rate tax payers

• http://www.facebook.com/profile.php?id=1185680962 Tom Halpin

  When claiming the benefit would it be too much to ask the father of the children being claimed for if they are higher rate tax payers?

• http://www.facebook.com/profile.php?id=1185680962 Tom Halpin

  The partner would be aware that they have children surely and aware of his/her obligations

• http://www.facebook.com/profile.php?id=1185680962 Tom Halpin

  You still have an obligation to declare all your income

• Lawton_Loves_Iniesta

  This is exactly why the treasury is panicking, because the woman will say i told him that i receive CB and the man will say she didn’t.How can you prove which of them has lied?