Tax chaos due as child benefit cuts come into play
Almost a third of families affected by George Osborne's child benefit swipe haven't been formally told that they'll no longer be eligible for benefits (means-tested from next Monday), which equates to more than 1.1 million families being affected and a whole load of chaos cutting loose.
HMRC have told 784,000 families that they must either stop claiming child benefit by this weekend or pay a new tax to cover the cost of the payments, however, with so many families not being told, someone is going to need a big, expensive mop to clean up the resultant mess when people realise their benefits have been stopped AND they'll be expected to pay something on top AND fill in self-assessment forms.
It has been estimated that there's around eight million people who'll have to fill in these new forms, with many of those finding the process too difficult and facing fines for late returns of their assessments.
Mike Warburton of Grant Thornton, the accountants, said: “We understood that everyone affected would receive a letter and it is a concern that people have not received the information. Many people are unaware that they will now have to complete self-assessment forms. It is disappointing.”
Barry Murphy, a tax partner at PwC, added: “The tax system seems to have grown to be overly complex. Until major reform occurs, we will have changes like this which will be complex and catch people unawares.”
All this has already been described as an "operational and reputational disaster", with the Institute of Chartered Accountants for England and Wales adding that the new legislation is "seriously flawed in principle and in practice". And yet, George thinks this is going to save the country £1.5 billion annually.