Paul Grant, Accountancy Age, Tuesday 5 October 2010 at 09:42:00

Chancellor?s decision to claw back child benefit from higher-rate tax payersincreases complexity for taxman


Chancellor George Osborne?s move to cut child benefit for higher-rate taxpayers could pile yet more pressure on an already creaking HMRC, which is facingfurther cuts.

Child benefit to families with a parent earning over 44,000 annually will beaxed from 2013, producing an estimated saving of 1bn a year. However, insteadof these payments being stopped, the money will be clawed back through the PAYEand self assessment systems.

The new system will add an extra layer of complexity to individuals? taxaffairs and likely increase the strain on HMRC, which recently miscalculated tothe amount of tax owed by six million people. The taxman is currently undergoinga significant cost-cutting program, due to be completed next year.

?There is a play-off between complexity and fairness,? Grant Thornton?s MikeWarburton told the Telegraph.