Labour MP John Denham fears that over 2000 families in Southampton could face the clawback of their child benefit because the Government has left it to individuals to find out whether the new system applies to them.
Those higher rate tax payers who don’t take action to stop their benefit from Monday could end up with a much bigger tax bill in years to come.
His warning comes after press reports that the HMRC has failed to contact a third of those who will be affected by next Monday’s changes.
The new High Income Child Benefit Charge means that parents lose child benefit if one or more parent earns more than £50,000. The benefit is lost entirely if one or both parents earn more than £60,000.
Mr Denham said :
“Most parents have assumed that the taxman would tell them about the changes which have already been changed more than once. It now turns out they haven’t even been able to let all the families know who will be affected. A third of families have not been contacted, which means over 2,000 people could be affected in Southampton.
“The change is already unfair because a family with one earner on 60k will lose their benefit while a family with two earners on 45k each – a total of 90k – will not. It is now also a compete mess, despite more civil servants working on the change than are chasing high income tax dodgers.
“Families in Southampton may end up having to pay a huge sum back to the taxman through no fault of their own. It’s about time that this Tory-led Government got a grip over their own policy”.