- 12 updates
The Treasury has defended itself following criticism from the Institute of Fiscal Studies (IFS) over its new Child Benefit system.
A spokeswoman for the department said it had disagreed with an IFS proposal to "abolish child benefit completely and (subsume) it into the tax credit system".
Responding to the claim from the IFS that families affected by the new Child Benefit system stand to lose an average of about £1,300 a year, the spokeswoman said:
She went on to challenge the criteria by which the IFS had to judge the reforms:
Families affected by the new Child Benefit system stand to lose an average of about £1,300 a year, the Institute for Fiscal Studies (IFS) said.
It is estimated that around 820,000 families, in which at least one adult has a taxable income exceeding £60,000 per year, stand to lose all their Child Benefit via a new income tax charge.
Additionally about 320,000 families in which the highest-income adult is on between £50,000 and £60,000 would have some, but not all, of it clawed back.
The remaining 85% of families currently receiving Child Benefit will be unaffected for now, although more will be affected in time because the £50,000 threshold is planned to be frozen in cash terms, the IFS added.
Speaking to ITV News Political Correspondent Alex Forrest, Treasury Minister David Gauke said that people will have any child benefit they wrongly receive reclaimed through their tax, even if they did not know they should no longer be getting the payments:
Some people wanted to know why they had not received a letter about the changes.
The newspaper says that as a result more than 300,000 people will have to begin completing tax returns for the year ending this April or face substantial fines.
A spokesman for HMRC told the newspaper: "There may be cases where people’s circumstances have changed, for example their income may have increased or address may have changed, and we will not yet have up-to-date information.
"However, to ensure people know about the changes we are also using extensive advertising, media and online activity, as well as written communication.
Find out more about the changes on the HRMC website.
Deputy Prime Minister Nick Clegg has admitted that axing child benefit for the richest families was an "excruciatingly difficult" decision.
Letters will be going out from HM Revenue and Customs from today to advise around one million households on £50,000 or more how their payments will change.
Mr Clegg said:
"I perfectly understand why people who don't feel wealthy don't like this change but I will ask them just to reflect for a minute there are many, many others, the vast majority of people in this country who are on much lower incomes than them, who are also having to make sacrifices."
We asked for views on the changes on the ITV News' Facebook page. Here are some of the responses.
Responding to a Conservative poll, that revealed that 82% of respondents backed plans to cut child benefit for high-earning families, a Treasury spokesman said:
An overwhelming majority of voters support Government plans to cut child benefit for high-earning families, according to a private poll commissioned by the Conservative Party.
The Populus poll found 82% backing for the move, which will hit the top 15% of earners on £50,000 or more and end the principle of universal entitlement to child benefit.
- 2,066 British adults were questioned between October 24 and 26.
- 82% backed the plan, against 13% who opposed it.
- Among households earning £69,000 or more, 74% were in favour, compared to 82% of those earning £55-69,000 and 80% of those earning £41-55,000.
- Strongest support, at 89%, was found in households with a total income of £14-21,000.