Monday, Jan 07, 2013

Tories will lose next election over this

Daily Mail: Child benefit 'shambles' drags hundreds of thousands more families into tax return misery

This has broken the fundamental rule of how the tax system taxes an individual.
Utter shambles & shameful grab of short term cash breaking the tax system.
Meanwhile, tax cuts to the super rich cronies.

Posted by doomwatch @ 11:42 AM (1828 views) Add Comment


1. libertas said...

All the companies I know that are growing have a policy now of not having employees. They all have large Partnership organizations and lots of Contractors. They could not survive otherwise. Government is destroying the economy.

We simply have to end the wars and forced re-distribution of wealth to the EU.

Monday, January 7, 2013 02:13PM Report Comment

2. mark wadsworth said...

The whole thing is bizarre.

What it amounts to is making people with children who earn more than £50,000 pay extra tax (Child Benefit is not a welfare payment to them, it is a tax rebate or a tax refund). So if you have two kids, you pay £1,700 a year more in tax (or whatever the figure is), total extra tax collected £1 billion a year (or whatever).

If they really wanted to collect extra £1 billion tax from higher earners, the easiest thing to do would be just to reduce the higher rate tax threshhold by £1,000 (or whatever).

I mean, most countries have a system where parents get a few quid tax rebate, whether that is an extra personal allowance or straight cash (like Child Benefit), so what the Tories are doing (in practice) is paying parents the cash amount and giving them a negative tax allowance for their children.

Utterly, utterly, bizarre.

Monday, January 7, 2013 02:29PM Report Comment

3. mark said...

i see russia has a 13% flat rate tax, very tempting :)

Monday, January 7, 2013 03:12PM Report Comment

4. mark wadsworth said...

mark, course it doesn't, these countries have "flat 13% income tax" but then their national insurance is something insane like 40%.

Monday, January 7, 2013 03:14PM Report Comment

5. alan said...

@ doomwatch,
My friends at the pub said... "the Tories will lose next election over ..." last week.

The conclusions offered were:
1. "Gay" marriage.
2. Europeean relations.

If I were to try and squeeze everythying into one "reason", I would say Nigel Farage. Only yesterday he was poking fun at both Labour and the EU by suggesting we hoard breakfast cereal in advance of a ban. Love him or hate him, he is relevant and funny, he can make a point in a way the Coalition members can't or don't.

Although I'm sure many contributors to this site may have other ideas....

Monday, January 7, 2013 03:20PM Report Comment

6. phils said...

"If they really wanted to collect extra £1 billion tax from higher earners, the easiest thing to do would be just to reduce the higher rate tax threshhold by £1,000 (or whatever)."

Or just reinstate the 50% tax rate they have just reduced to 45%!

Monday, January 7, 2013 03:20PM Report Comment

7. mombers said...

Funny how 50% is too high a tax rate for those on over £150k, but 57% is fine for someone on £50k who is raising the next generation of taxpayers...

Monday, January 7, 2013 03:45PM Report Comment

8. doomwatch said...

Same old Tories eh. 2 child family robbed of the about £1745 per year, which is about a decent weeks holiday, or

Meanwhile landlords are STILL allowed tax rebates on their effing mortgage interest payments. What
a bunch of cunning stunts the Tories are.

Monday, January 7, 2013 03:50PM Report Comment

9. jack c said...

It will be interesting to see in due course if the Child Benefit reforms produce any additional savings - there must be lots of extra expense moving to the new banding's from what was a universal benefit. Governments have looked at this in the past and elected to leave well alone (not just for the political flack) but also because the cost/benefit analysis did not make it financially viable.

Monday, January 7, 2013 04:03PM Report Comment

10. mombers said...

It's not inflation linked so depending on how effective the Bank of England's inflation program is, Child Benefit will be gone altogether except for the unemployed

Monday, January 7, 2013 04:07PM Report Comment

11. doomwatch said...

mom @10. This is also doesn't make sense, given the Tories alleged deep seated dislike for NEDs
breeding like rats & claiming bumper child benefit.

Monday, January 7, 2013 04:26PM Report Comment

12. mark said...

why does anyone with a salary of more than £40k a year need child benefit? the country is full of scroungers, would it not be easier to take away all these daft schemes and reduce taxation

Monday, January 7, 2013 05:07PM Report Comment

13. jack c said...

mark (Monday, January 7, 2013 05:07PM) - Sadly we have made whole industries from such schemes as CB/CTC/WTC etc.... Tax simplification should be high on any sensible Government's agenda - Mr Wadsworth has made many a valid post on this over the years.

Monday, January 7, 2013 05:17PM Report Comment

14. iguana said...

Yet again the posh boys are getting away with it, all of the pundits are whipping themselves into a frenzy about pointless trivia (the above notional change in taxation/benefit) yet we are still saddled with the debts of the tory friends in the banks and it would seem that we will be paying for that pleasure ad infinitum or until a future executive has a flash of reality and tells the banks to take back their debts, and repay the interest they have conned us out of. Perhaps then we could look forward to a sensibly planned economy not one periodically held to ransom by small minded self serving plutocrats and their good friends in government.
Happy new year all!

Monday, January 7, 2013 07:21PM Report Comment

15. mark wadsworth said...

@ Jack C, thanks

@ Mark, if your higher earner couple is paying £20,000-plus a year in tax, how on earth does Child Benefit count as "welfare spending"?? It clearly isn't "welfare spending" at all, it is merely a modest tax rebate. if instead of Child Benefit, working parents got an enhanced personal allowance for having kids (like some countries do) would that count as a tax break or as welfare spending? It counts as a tax break, doesn't it, even though mathematically it is exactly the same thing.

And don't forget, Child Benefit is only £12 billion a year, which is the equivalent of 2% on income tax, so if we had an earmarked and hypothecated 2% tax to pay for it, a couple with two kids getting £2,000 a year who earns £100,000 between them is paying net zero and getting net zero benefit anyway. There is no need to then means test it so that the £100,000 earner couple doesn't get it (but still allowing them to pay the extra 2% tax).

Monday, January 7, 2013 10:25PM Report Comment

16. greenmind said...


Monday, January 7, 2013 10:56PM Report Comment

17. Pezzer said...

@mw, unless my memory has failed completely,when I was an articled clerk (yes I'm that old) there was a child allowance which was given in your notice of coding so if we reinstated that then it would have the same effect (and at much lower admin cost than the current proposals).

Tuesday, January 8, 2013 08:53AM Report Comment

18. mark said...

MW all I am saying is, this whole system is rubbish, get rid of all these daft time and money wasting schemes and just drop the whole tax rate, why spend money employing people and using office space, etc to manage these systems.

plus if it is a tax cut or handout I dont really care, people cannot be that badly off to need this all it does is encourage people to have too many kids, it makes me sick when someone sitting in luxury earning above average salary moaning about what 15 quid a week? so dont go to the coffee shop every day or stay in one night a week, do they really need to buy the loubs? do they need the paul smith jacket? these people need to get real and stop whining

Tuesday, January 8, 2013 11:15AM Report Comment

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