The Treasury plans to write to the UK’s four million higher rate taxpayers
Higher rate taxpayers could be fined if they fail to declare their partner receives child benefit.
The Treasury has confirmed that “penalties” would be issued in cases of non-disclosure of earnings.
The benefit is to be stopped from 2013 if at least one parent earns over £44,000, but some experts have questioned whether this is workable.
They say the tax system traditionally looks at individuals rather than couples, making administration harder.
In many cases, the father is the higher rate tax payer, but the mother receives the benefit.
‘Complex and intrusive’
That makes it much harder to administer – because couples do not always know about each other’s finances, and if they split up things become even more complicated.
The government plans to write to all four million higher rate taxpayers asking them whether their household gets child benefit.
Those who fail to answer or do not tell the truth could be fined.
The Treasury says legislation will be brought forward to implement the change, but critics say this could create a much more complex and intrusive tax and benefit system.
Chancellor George Osborne announced the changes earlier this month in a move designed to save £2bn a year.
But critics, including Labour, seized on the “unfairness” of the reforms for stay-at-home mothers.
A couple who are both working can earn more than £80,000 between them and still claim benefit, while those relying on a single income just above the higher tax rate will miss out.
Shadow work and pensions secretary Yvette Cooper said the government’s policy was “unravelling” – a claim Treasury sources have dismissed as “nonsense”.
A report in the Wall Street Journal on Thursday claimed the Treasury was struggling to find ways to make the the plan work
Impact of child benefit cutTax rate Annual income Benefit Keep or cut?Lower
£43,875 or less
£1,752.4
Higher
£43,876 or more
0
2x Lower
£87,750(2 x 43,875)
£1,752.4
1x Lower1x Higher
£87,751(43,875 + 43,876)
0
Note: higher rate tax begins after earning £43,875 (£37,400 + personal allowance of £6,475)
Source: HMRC
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