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Child benefit controversy

Baker Tilly has weighed into the controversy over changes to the child benefit system.

Partner Gary Heynes argues that since the Conservatives announced in 2010 that they would be cutting the benefit to those in the 40% band or paying over £43,000 a year, it has become 'one of the clearest signs of how a simple idea can necessitate complex legislation'.

He notes anomalies includes the fact that if one earner in a family falls into the 40% band the benefit will be lost altogether whereas two earners £1 below it will continue to receive it.

He argues another flaw is that if you receive £1 more in income to take you into the band you would lose the benefit and would therefore be better off without a pay rise unless it came to over £3,000 a year. Other problems include the definition of 'income'.

Heynes maintains the best idea 'politically difficult as it may be' is to scrap the idea altogether.

Further information from taxguide.co.uk on child benefit and working tax credits is available here.

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