tax planning for higher rate taxpayers

The heated debate over the removal of child benefit keeps going

the new governent had to make savings and they confirmed earlier this year that child benefit would be removed for high earners

New Laws will require those earning more than about £42,000 a year to inform the Inland Revenue if anybody in their household is claiming the benefit. The Treasury said that non-disclosure would be breaking the law and result in "penalties".

There are concerns that the proposed system will be difficult to administer.

The opposition have claimed the proposals will not work and are unfair. Labour go on about the issue and the unfairness, but they got us into this mess to start with.

The concern is that claimants will have to advise the Revenue if their partner is a higher rate taxpayer. People can get confused about tax and some will unintentionally not advise HMRC..Higher fee tax payers could consider tax planning to decrease loosing child benefit.



HMRC have confirmed penalties will be used if people do not disclose relevant tax information.

However its not only labour that have expressed concern.. Ian Liddell-Grainger, head of the parliamentary group on taxation, stated the move will be practically unenforceable. "One with the large difficulties government entities has would be that the program they have just isn't a real-time system and thus this will likely be virtually unenforceable," he told BBC Radio 4's Today programme. His concern is the HMRC are not able to process information in relation to tax quickly enough.

The PM David Cameron later said he did not foresee any problem with compliance.

In reality the UK needs to reduce the amount it owes. Tightening the "purse strings" needs to be done . Most people and families will be worse off over the next few years.

Everyone understands the process will be painfull but necessary.We now have to bite the bullets and accept it. Tax increases and less money in the system will be a thing of the future for the next few years. It will be a bumpy ride!.Make the most of the tax planning breaks available.