CB cuts - bit more news on implementation and criticism from experts

[EdithWeston]

BBc article here.

It quotes senior tax and accountancy figures saying that HMRC expects couples to share information, and also will be ready to pass certain information about one partner to another to let them ascertain if the other pays HRT. This undermines independent taxation of couples (in place since 1991) and runs counter to the principle of taxpayer confidentiality (a formal part of the tax system since 1803).

Revealing someone's tax records is currently a criminal offence for HMRC officials.

That such senior figures have concerns, calling it a bad tax, is concerning. And changes to such long-standing principles of the taxation should surely have been subject to more attention.

The whole CB debacle is a stupid stupid policy which I suspect had about 10 minutes of thought over breakfast before the Tory party conference.

I wish they'd scrap the whole idea and say its a mistake rather than trying to force a shit idea through just to save a bit of face.

"Revealing someone's tax records is currently a criminal offence for HMRC officials. "

Hmm, but if you put in a claim for tax credits the income of both partners is listed in the award - why is it ok to expect couples to share information fotr one thing but not the other?

Tax credits are a benefit, aren't they? No interaction with the tax system, despite the name. CB also had no interaction with the tax system either; it is the new idea of taxing a non-recipient that us causing the difficulty.

The experts quoted by BBC are pretty scathing. It does seem strange that the Government wishes to bringing a policy which requires in its implementation something which is currently an offence.

Still the paperwork reveals all earnings/income and is always addressed to both claimants in the household. Surely the information how high the income is, is enough information for anyone with half a braincell whether the partner is paying HRT or not.

The difference is that with tax credits you are both volunteering the information in order to apply for a benefit. Your OH can choose not to tell you or reveal the information, you just don't get the benefit.

But the dilemma being talked about here is the fact you could call up HMRC and get told private information without his consent so you can decide whether or not to claim CB. And currently that's illegal for HMRC to tell you that. Put another way. Right now if you called HMRC up and said "Does my OH earn > £50k?" Their answer would be "We cannot tell you that for legal reasons"

In future their answer will be "Yes" or "No"

I guess it sounds like a small change but the fear is that it is the thin end of the wedge in the principle of independent taxation and privacy.

The independence is in paying tax, not claiming benefits. If two people have children, live together, they aren't independent. If a couple choose to keep their money separate, that's personal choice. But hiding your earnings from your 'partner' is really odd. I cannot see it being good for family finances. Also if the couple are married, they are both responsible for the debts of the marriage, whoevers name the debt is in.

Just speculating, but do women hide their earnings from their dp or just men hiding it from women so they can spend 'their' money on themselves?

Either way, any change that stops enabling dysfunctional couples is a good change.

If CB was a joint benefit, paid to couples, that would all hold true.

It is not.

This is taxing person X on person Y's benefit, and senior accountancy and tax experts are pointing out that this is a game changer in terms of principles of confidential and independent taxation.

I do not think the tax system is either an enabler or a deterrent to relationship break ups or abuse in continuing ones.

Wasabi, I completely agree with you. In any long term relationship where you are living together with another person, it is both odd and dysfunctional to hide money from each other.

Personally I also do not agree with the way many couples seem to organise their finances. We see it everyday on MN where the woman earns less but contributes the same as the man then she's resentful because he's got more money. etc. etc.

But at the end of the day in a free society couples should be free to live in a dysfunctional relationship if they want to. There's just no obligation we need to pay for it.

Well said niceguy.

Edith, then that should change. The idea that the state pays money to one parent, usually female, is bizzare. It says to me 'most men cannot be trusted to prioritize their own children but women can' which is sexist to most men.

I wasn't saying it can't change.

I have linked the views of experts who say it is attacking basic current principles of the UK taxation system, and eroding both confidentiality and independence (to an extent that is currently illegal). It is disappointing that such a huge change, for something characterised in the article as "the best of a bad job" (to take the most positive description) is going through without scrutiny.

Chipping away at the financial independence of married women is not something I would ever personally support.

but they arent financially indepedant. if DH runs up debts they are 'debts of the marriage' and the women is equally responsible, even if she never knew anything about it.

if the couple have a change of circumstances then split up or go on benefits, the couple are not financially independant.

Legally they are DH's debts and nothing to do with the woman, she doesn't have to pay it back. In practice though it would affect the wife of course.

www.grounds-for-divorce.co.uk/divorce-settlements.html

this is what is was referring to:

"any debts such as loans and mortgages will be treated jointly as marital liabilities, although if one individual has accrued debts for their own purposes, for example through a gambling, drink or drug addiction these may be treated as individual debts rather than joint debts of the marriage"

not knowing your DH/DW's finances sounds vulnerable

This has just been on the BBC news.

One interesting points that this is probably going to lead to an additional 500,000 people having to fill in tax forms (how much will the extra staff to process them cost? Or will it just cause more chaos by exacerbating backlog). Not to mention all the tax codes that will need annual checking and and adjustment.

Some interesting points about blending families and those that break up (especially it appears that it is likely to take a year to claw back).

And this is first time the importance of the NI credit had a proper airing.

I'm getting the feeling that there is beginning to be a quite strong consensus that the way they are implementing this is flawed beyond remedy.

Surely they could have come up with a way of reducing this budget without such complication and changes to some basic principles that are actually quite important to the whole tax system.

I saw that on the news too. Sounded like it was going to cost HMRC a lot of time and money to implement.

It does seem very unfair that a high earner may be taxed in order for their step-childrens child benefit to be paid.

But at least they're mentioning pensions now.

Here is an article from the BBC today which shows that the Institute of Chartered Accountants has now come out against this measure, on the grounds that it is bad, on both a policy/principle and practical level to try to merge the household based benefits system with the individual based taxation system.