Is child benefit reform a backdoor crackdown on tax dodging?

You will have read a fair bit about the child benefit changes by now. We’ll be looking at them again in the magazine this week (out on Friday).

But one aspect of it keeps striking me as slightly odd: the number of people that everyone says will now have to fill in tax self-assessment forms as a result of the change. According to the Institute for Fiscal Studies (IFS), the total number of families affected will be 1,134,000 (820,000 will lose all their benefit and 320,000 will lose part of it). Of those, the IFS says, something in the region of 500,000 families will now have to go through the “administrative complexities” of self assessment. Others put it higher. 

But here’s the thing: I can’t see how that many people can be getting away with not filling in a self-assessment form in the first place. You have to fill in a self-assessment form by law if you are self employed, if you earn over £100,000, if you are a company director, or if you are a Lloyd’s name or member.

It is also the case that all income is taxable. If you earn £50,000 a year, you have already used up any income allowances you might have, so every penny from any other source attracts tax. Any income from your bank accounts (even the 34p from the miserable interest rate there might be on your current account) is taxable. Any income from investments held outside an Individual Savings Account (Isa) or SIPP (Self-Invested Personal Pension) is taxable. Any income from property is taxable.

It seems amazing, surely, that there could be 500,000 people in the UK with earnings between £50,000 and £100,000 earning not one penny in non-PAYE income.

Now it is possible to be earning interest, property or dividend income and – as long as it is less than £10,000 a year – to have it taxed somehow via your tax code, rather than via self assessment. But I have no idea how this works and I have never ever heard it mentioned by anyone (except for HMRC here). And if you think self assessment is an “administrative complexity” just think about the nightmare it would be trying to adjust your tax code every year to take into account changing interest payments and dividend fluctuations.

My point is this: there are a huge number of people in the UK who are higher-rate tax payers but who, intentionally or not, are evading higher-rate tax on their non-PAYE income by not declaring it on a self assessment form.

The changes to child benefit payments have the interesting side effect of making them either give up their benefit completely, or bring their other income into the net via self assessment. The general opinion is that the changes are a shambolic disaster. But look at it like this and they are devilishly clever. I’m impressed.

83 Responses

  1. 08/01/2013, Tormod46 wrote

    I think there is probably some truth in your scepticism, though as an example: there was a point when I was a higher rate taxpayer, doing self assessment, but after a few years of very dull returns (PAYE, plus a tiny bit of bank interest – the rest was in ISAs and pensions) HMRC wrote to me and said that I no longer needed to submit a return.

    I more wonder about how many higher rate taxpayers have not been doing self assessment, and therefore not getting full tax relief on pension or charity contributions?

  2. 08/01/2013, dr ray wrote

    Merryn,
    There seems to be no logical reason to voluntarily opt out of child benfit except to avoid filling a tax return. Persumably the folk who currently should but don’t fill a tax return will opt out and ones who fill a form anyway will opt for the interest free loan that child benefit has now become.
    My conspiracy theory is that the benefit changes are a prelude to hyperinflation. Currently, inflation is a rather ineffective government policy because of inflation linked benefits but the cap on benefits at 1% (having already capped public sector wages at 0-1%) would make inflation rather useful. continued..

  3. 08/01/2013, dr ray wrote

    …… The other thing which supports this is that the new Govenor of the BoE was not offered an index linked pension. Obviously if he is being employed to cause inflation it would be best if he is not seen to be a beneficiary and it may explain why he is being offered £5000 per week for accomodation. Presumably this figure will not seem outlandish in a few years and saves the embarrassment of him having to renegotiate his renumeration halfway through his tenure.

  4. 08/01/2013, Ellen wrote

    I read a comment over the weekend that suggested the conspiracy behind the withdrawal of child benefit was to breed an intolerance by higher earners towards the entire welfare system as they are not allowed to access any part of it.

    I do think, however, a lot of time has been spent on this when the banks are the biggest welfare recipients, in effect. I think it called ‘penny wise, pound foolish’.

  5. 08/01/2013, Alfista wrote

    I earn between £50 & £100k per annum, and (as reccomended by MW) all surplus net income goes into a saving account linked to an offset mortgage hence earning no interest, and to the best of my knowledge removing the obligation for me to complete a tax return.

  6. 08/01/2013, Romford Dave wrote

    A lot of time has been spent on the fairness or unfairness of not receiving CB Ellen, but precious little on its unintended consequences.

    Tormod46 highlights one area where higher rate taxpayers not routinely submitting annual SA forms may be missing out on tax relief for their charitable donations, but its long been known that not all higher rate relief available on pension contributions has been claimed back (which admittadly is less of a problem with the reduction in thresholds) but supposedly a significant number nonetheless.

    It’ll be interesting to see how the pursuit of accuracy pans out between the newly uncovered tax evaders and previously undiscovered relief avoiders.

  7. 08/01/2013, me98 wrote

    Not sure why people are being paid to have babies in an overpopulated country and an overpopulated world.

    If you cannot feed them don’t breed them

  8. 08/01/2013, Boris MacDonut wrote

    #7 Me. In what way is the UK overpopulated? Various studies show it can easily support 150 million people.
    People are not being paid to have babies. Child Benefit is for children and it goes equally to foster or adoptive parents who did not have babies themselves. FYI child benefit is worth about £16,000 per child over 18 or 19 years and it costs £220,000 to raise a hild to that age. Every society needs children to rejuvenate and offering an assistance that amounts to less than 7% of the cost is the least moaners like you can do.

  9. 08/01/2013, Boris MacDonut wrote

    Thank goodness the Eton Toffs have reverted to their natural habitat. How lucky we are to have a load of trust fund kids saving us from the largesse of the chavs and the failures. Workers not shirkers. Strivers not skivers. Imagine my chagrin each day when I glimpse my neighbour’s curtains still closed at 7am, while I am off to matins and pilates on nothing more than a couple of figs

  10. 08/01/2013, Critic Al Rick wrote

    @9. Very droll, Boris, very droll.

    @8. “In what way is the UK overpopulated?”

    To put it simply: whilever the UK has a Balance of Payments Deficit it is overpopulated. A better Balance could be realised if, for instance, we did’t have a net import of foodstuffs.

    150 million? Which narrow-minded academics came out with that one?

  11. 08/01/2013, JT wrote

    @Boris 9 – another classic failing of the Left. With no alternative solution for managing the unaffordable welfare bill, you simply fall back on trying to toxify the Conservatives. I’m afraid you will have to do better than that if you want to influence policy.

  12. 08/01/2013, Boris MacDonut wrote

    #10 Rick. If you die in debt you make a profit a out of life and it seems to irritate the Tories too……double whammy.

  13. 08/01/2013, Boris MacDonut wrote

    #11 JT. Another classic failing of the Tories . With no solution for managing the welfare bill you simply fall back on demonizing the poor. I’m afraid you’ll have to do better than that to get re-elected. Reduce tax for the rich by 5% and reduce benefits for the poor too. It seems reducing is all you can manage.

  14. 08/01/2013, JT wrote

    No one is ‘demonizing the poor’, Boris, that is just shameless spin by you and the rest of the Left. Try harder.

  15. 08/01/2013, Romford Dave wrote

    A failing shared by all those who seek to govern Boris, hardly the exclusive territory of the boys in blue.

    No solution should be the title of every manifesto, it suggests an honesty missing from the political scene since political scenes began

    At least the Cameron/Clegg relationship offers a change from the dreary as far away from socialism as you could get face of Milliband/Harman.

    Was the 5% tax reduction for the rich, that wasn’t by all accounts being paid anyway, a clever concession by Clegg to fulfil his dream of a higher personal tax allowance knowing who benefitted most by it?

    Who knows.

    The only thing that we do know is the price of political honesty appears to be too high if you seriously want to be elected, which would suggest it’s those that vote who encourage the snake oil spin.

  16. 09/01/2013, Steve T wrote

    #8 Boris – re comment 7 above you state “Various studies show [UK] can easily support 150 million people”. In post #70 (on the Growth Won’t Save Us blog) in response to my accusation of silliness in your posts you state “My comments are rigorously researched. I pride myself on factual accuracy”. OK – here’s a challenge for you. Please quote the sources of your claim to various studies showing the UK can easily support 150 million people. That’s plural.

    And here’s a nugget for you to consider while you scrabble for references – the amount of land available to each inhabitant of the UK, comprising a surface area of 24 million hectares of land and inland water, to absorb the environmental impacts of all our consumption is less than half a hectare (one acre) each – and this environmental space is shrinking every year [source: The UK’s population problem By Rosamund McDougall Co-chair of the Optimum Population Trust 2002-2005 and joint Policy Director 2006-2009].

    Over to you.

  17. 09/01/2013, Dr Ray wrote

    Boris
    The “millionaires tax cut” is pure Balls. Yes there will be a few multimillion £ tax contributors who will be marginally better off but the 5% reduction in additional rate tax doesn’t even come close to making up for the loss of personal allowances and the lowering of threshold for 40% tax (to compensate for higher personal allowance which higher earners don’t even get!). Add on the loss of child benefit and the increase in University tuition tax which only affects higher earners and it is clear that the “millionaires” are more than paying their way. In fact a tiny proportion of the population pay almost all the tax and approximately half the population are net beneficiaries even taking VAT into account.

  18. 09/01/2013, Niall MacKay wrote

    “to have it taxed somehow via your tax code, rather than via self assessment. But I have no idea how this works and I have never ever heard it mentioned by anyone”

    It works very well for me. Every year now for the last decade I’ve simply written a letter to HMRC giving details of my additional, non-PAYE income, my professional subscriptions, charitable donations etc., and they’ve adjusted my tax code.

    These adjustments are all rather small, but in order for me to remain scrupulously honest they have to be made. This way is much less effort for me and for them than creating and processing a full tax return.

  19. 09/01/2013, Engineer wrote

    I cannot understand why all of the freebies are not subject to tax. Why not claw back 50% of the money from those on higher incomes. The current system simply perpetuates the Brown love of complexity, employs more people to administer, at higher cost. The tax system exists, albeit far too complicated. Get rid of tax credits, raise thresholds further, and make everyone fill in a tax form.

  20. 09/01/2013, dr ray wrote

    Engineer @ 19
    The higher earners are taxed on the freebies in a roundabout way.
    When universal benefits were first thought of they made them universal and then taxed higher earners more to claw them back and in fact support the system for lower earners. That made the higher earners feel they get something out of the system and support it. It was easy and cheap to administer. Now some Einstein has decided not only to increase taxation on higher earners but to take away the “benefits” and it won’t be long before higher earners begin to ask why they should support the system at all and start voting for more extreme right wing politicians or just evade tax which is simpler, direct and more effective.

  21. 09/01/2013, The Preston Park Panther wrote

    Removing CB is just reinforcing the basic welfarist principle, which is that if you pay in, you shouldn’t expect to take out.

  22. 09/01/2013, 4caster wrote

    Like Merryn, I too am surprised that so few people file an income tax return.
    I am not a higher rate taxpayer, but have to do one every year, because my pensions exceed the age-allowance clawback ceiling.
    Even my wife had to do one last year, as a non-taxpayer, to recover a paltry bit of tax on interest that a bank deducted by mistake.

  23. 09/01/2013, Le Brit wrote

    MacDonut what planet do you live on???? 150m people in the UK the country is almost gridlocked now, we are the most densely populated country in Europe and you say we could more than double our current population, what a load of tripe. Maybe you are keen to see whether or not Malthus was correct, too dangerous it only needs a large volcanic eruption or a few bad summers and how will 150m people be fed???? I presume you would allow unrstricted immigration from anywhere to reach the 150m figure? Statistics can prove anything, the population of the UK could fit on the Isle of Wight but totally impractible.

  24. 09/01/2013, Alex wrote

    Merryn – you are quite right to spot this, there are hundreds of thousands of PAYE tax payers (inc higher rate) who have never been sent a self-assessment because they did not request a tax return so are under the tax radar with regards to all non-PAYE income. Unfortunately this country’s leaders and bureaucrats have been completely useless when it comes to getting everyone to pay their fair share with many paying zilch and I am not talking about non-doms, who quite rightly have their own specific circumstances and categorisation.

  25. 09/01/2013, MRS C wrote

    earn more than £2500 in untaxed income.
    5. Did you receive income from property
    6. Do you receive foreign income liable to UK tax
    7. Are you an employee claiming expenses or professional subscriptions of £2500 or more.

  26. 09/01/2013, MRC C continued wrote

    If you can answer no to all the questions and you earn £2499 untaxed they just let you off up to £1000 in tax. So they must reckon it costs £1000 to process a return.

    We have an inefficient system which requires manual “capturing” of every return that is filed online, so it is costly in manpower to process tax returns. We need a little bit of decent IT kit that automates the process and enables us to co-ordinate across departments and perform automatic checks. Then if everybody was required to file a return it would be cheap and would solve a lot of our problems.

  27. 09/01/2013, Romford Dave wrote

    That’s a very liberal interpretation of what you’re supposed to do with £2499 of untaxed income Mrs C, unfortunately you’ve overlooked this bit of tax law: -

    “You should let HMRC know about changes to your income – even if you’ve received the income outside of your job or pension and it’s not dealt with through Pay as You Earn (PAYE) by your employer or pension provider. For example, if you start receiving rental income.

    HMRC may be able to change your tax code so that you pay the right amount of tax. If they do this you’ll get a PAYE Coding Notice explaining the changes to your code and you may not need to complete a tax return.

    However in some cases HMRC may ask you to complete a tax return and pay any extra tax through Self Assessment. HMRC will write and let you know if they need you to complete a tax return.

    If your taxable income has gone down you may be due a refund”

  28. 09/01/2013, Romford Dave wrote

    The power of HMRC is something to behold when they discover you’ve untaxed income from yesteryear. They think nothing of making an assumption that you must have lied for the last 20 years and issue a demand accordingly, leaving you with the expense of trying to prove that their assessment is wrong by way of receipts/bank statements/cheque stubs etc etc an almost impossible task given the time span involved.

    Slightly off topic but it highlights the power of HMRC and his guy won his case!

    Google ‘How-one-family-were-brought-to-their-knees-by-the-taxman’

    (I’d normally put a link in, but it seems rude when its another publication carrying the story that I’m referencing)

  29. 09/01/2013, Clive wrote

    Some years ago, HMRC suggested I stop filling out the full return and went for one of their mini-forms instead (interest, gift-aid). I did that for a year or two but soon found that I could not verify the tax that were collecting each year via PAYE. Two years in, I wast still paying off (according to HMRC) money due in year 1.

    Hence, I voluntarily went back to doing the full form. I complete it online. It’s not very onerous, I have little to fill in. It allows me to square my tax affairs each year, so I don’t have to trust HMRC’s figures.

    Can’t see what the fuss is about with regard to tax returns. As to benefits, I see no logic to the “we have to give everybody some benefits in order for them to feel happy with what they pay in”.

  30. 09/01/2013, dr ray wrote

    Clive @ 29 “I see no logic to the “we have to give everybody some benefits in order for them to feel happy with what they pay in”
    There is no logic – it is just human nature. Same as people buying a lottery ticket when logically they would be better off keeping their £1 or paying a couple of quid at the funfare for a chance to win a toy worth 50 pence. Can you imagine what would happened if higher earners were told they can still buy a ticket for the lottery but there would be no prize as they don’t need the money?

  31. 09/01/2013, Clive wrote

    dr ray @ 30

    I’m fortunate enough salary wise to be a 40% tax payer, but I don’t expect some goodies back.

    If that idea was to catch on, the government would be tempted to say “OK you want (more) money back, we’ll put the 40% band up to 42%, then we can give you more back”

    I think a simple idea to reduce the size of the benefits system – which imo needs to be massively smaller – would be to have a simple rule – no benefits if you earn above the average wage. Even then, perhaps we should reduce that by 5% per year, e.g. 95% of average wage in year 2 from now, 90% of average wage 3 years from now…

    Line graph in The Sunday Times weekend just gone showed how the benefits system, as a percentage of GDP, has essentially tripled since the 1950s.

    More people expect out of the system, the more it’s going to cost, obviously. I want it to cost less, hence it has to pay out less.

  32. 09/01/2013, Clive wrote

    dr ray @ 30

    …continued

    If somebody was unhappy at paying (say) £10,000 tax and getting nothing back, would they be more or less happy if they paid £11,000 and got £1,000 back ?

    I’d hope they saw no difference.

  33. 10/01/2013, Dr ray wrote

    “If somebody was unhappy at paying (say) £10,000 tax and getting nothing back, would they be more or less happy if they paid £11,000 and got £1,000 back ?

    I’d hope they saw no difference.”

    Back to human nature again Clive.
    I have patients who pay for private investigations and are disappointed when the investigations shows nothing serious because they think they have wasted their money!

    Logically speaking there might be no difference to your wallet between being mugged for £10 or giving £10 to charity but the effect on ones psyche is totally different.
    Higher earners now feel they are being mugged rather than contributing their share to society.

  34. 10/01/2013, Clive wrote

    Dr ray @ 33

    Just as (I’ve read) some patients aren’t happy unless a visit to the doctor for a minor complaint leads to them being given a pill, even if that pill is a placebo, perhaps we need the the equivalent in the tax system – a tax system placebo. The state can then say “there you go, Mr/Mrs high earner/contributor, you’ve been given something back (of no actual value)”

    I do wonder how much of this “human nature” is actually recent conditioning, i.e. the growth of the benefits/welfare system – and it’s associated cost – has made everybody think they’re “entitled” and it’s “not fair” if they don’t get some reward themselves.

  35. 10/01/2013, Barkingmad wrote

    Ahh… the old Boris arguments of we should tax the rich more – even if it results in lower actual tax receipts – it’s like cutting off the hand that feeds you!

  36. 10/01/2013, Barkingmad wrote

    “Higher earners now feel they are being mugged rather than contributing their share to society.”

    Think a lot comes down to fairness – it’s inherently unfair that in a family where a single earner makes £60k they lose it all yet another family with two earners making £49000 each they keep it all despite them having a much higher total household income.

    I agree there is little point paying benefits to higher earners but think the way it was implemented could have been improved to take household income into account and over a wider band so the marginal tax rates are not so high.

  37. 10/01/2013, d. anre wrote

    Many people don’t fill up a tax return form because they are on PAYE . If they earn more than £44,000 (?) tax is automatically deducted at 40%. They only need to do so if they have additional income and many teachers, doctors, managers do not!

    But why people earning more than £50,000 are causing such a lot of fuss about missing the odd thousand beggars belief. If they cannot manage on such good income another thousand will not make a difference.
    One answer is that many journalists earn such salaries and they will lose out! So they are creating a fuss. Media rules OK

  38. 10/01/2013, Dr Ray wrote

    @37

    Many of us were brought up to believe that if you look after the thousands, the millions will look after themselves!

    Thats why I am careful not to let the odd thousand slip under the sofa cushions or let the govenment mug it off me.

  39. 10/01/2013, Boris MacDonut wrote

    #16 Steve T. There speaks a true irrational green pessimist. Why shouldn’t we have 150 million folk? Only 12% of our land is built on. Prospect magazine has shown that the greens need to wise up ignore Malthus. Mankind is endlessly innovative and sustains a population already infinitely larger than just 200 years ago. World Pop is set to grow by just 30% by 2050 but the world economy is set grow by 300% or more. As I write the typical UK citizen has 4 to 5 times the world average income, so we could easily absorb a doubling of our population over 50 years and still be relatively rich and not overcrowded. The UK is the 51st most densely populated nation ,behind Japan, Holland, India,Korea, Phillippines….. I have read this on several occassions, maybe not in “studies as such”.

  40. 11/01/2013, Steve T wrote

    #39 Boris – what would I do in the mornings if I didn’t have your posts to laugh at? Starting off my day with a smile, that’s a public service, so thank you.

    And also thanks for admitting your comments are based not on, as you have claimed in the past, ‘rigorous research’, but on something you read somewhere.

    Keep up the good work.

  41. 11/01/2013, Boris MacDonut wrote

    #40 Try listening to some TED lectures by giants like Hans Rosling or Bjorn Lomberg, or Matt Ridley’s book the Rational optimist, they may even convince you to drop the pessimism. Who is to say the World could not sustain 20 or even 30 billion of us? Why do you moaners always assume we live in uniquely difficult times on the cusp of disaster? Your favourite line being “the way things are going”. I simply don’t buy into it as it is motivsated by wooly thinkers.Well meaning types proven wrong over and over again like the end of the world religious nuts.
    The UK had 9 million souls in 1801 and 64 million today, so why not 150 million in 2101?

  42. 12/01/2013, Steve T wrote

    #41 Boris – here’s one for you. Google Dr Albert Bartlett: Arithmetic, Population and Energy. You will find his lecture on You Tube.

    Once you have listened to the mathematics of population and understood the impossibility of exponential growth on a finite planet, you will realise what a load of twaddle your posts are.

    Come to think of it, you won’t. Your blind faith, certainty, unquestioning belief, and arrogant conviction that you are right will always prevent you from seeing the real world.

    [Apologies if this is posted twice - technical gremlins are to blame]

  43. 12/01/2013, StevieG wrote

    #1, 25 & 26 -
    I think you’ve summed it up perfectly. I got my ‘no need for an SA return letter’ after a few years of relatively high pension contributions and associated tax reclaims. Perhaps cynically at the time, I thought these may be linked events, but now I don’t.

    I think it’s precisely as you say, a focus on reducing the numbers who file an SA return to the optimum cost effective level.

    As for my investment income, I write to HMRC every 2-3 years, tell then what it was and ask them to adjust my tax code to correct their previous estimates.

    I am. of course, an accountant.

  44. 12/01/2013, ROLYPOLY wrote

    Those who opt out of receiving the benefit will be food and drink to HMRC who will presumably take a deeper interest in past tax returns and be looking for any un-declared earnings from investments.

  45. 12/01/2013, JNW Cheltenham wrote

    One other interesting ruse to identify non payment of tax is the HMRC Real Time Information system. This system is obligatory in the new tax year for small businesses. All casual labour must be listed with Names, Hourly Rates, Nat Ins Numbers, addresses etc.. If these people are currently claiming benefits and not paying tax on their casual earning, they will have an issue. If it keeps my tax rate down and reduces our rediculous debt, then good on HMRC. However, I wonder if they will be able to manage it – watch this space!

  46. 12/01/2013, Coastwatcher wrote

    There will be many couples where one partner claims child allowance, and the other partner is earning more than £60K but does not declare child allowance income in self assessment.
    Interesting to see whether this transgression will be treated as tax evasion (a mild slap on the wrist) or as benefit fraud (the full force of the law)……

  47. 12/01/2013, Boris MacDonut wrote

    #42 I am not talking of exponential growth nor a finite population. I am saying the World could well support 4 times as many people and the UK could easily double its population. Currently there are too many vested interests in the elite landowning classes restricting efficient food production and land for building. From 1801 to 2011 UK population rose at around 1% pa. I am only suggesting that population could carry on at a slightly lower growth rate of say 0.8% pa and be readily accomodated.
    This is no arrogant conviction ,I just trust myself to have researched as widely as I can and draw my own conclusions. Sorry it goes against your wishes and undermines what you would like .

  48. 12/01/2013, Boris MacDonut wrote

    I see Cameron doesn’t want to be re-elected. After the Child Benefit chaos,today the Eton toffs announce the pension changes for 2017.
    A flat rate £144 a week (£7,500pa) for all, paid for by increased National Insurance Contributions for anyone still in a final salary scheme. That is about 1.2 million in the private sector and 5.4 million in the public sector. Aside form punishing (mainly the public sector again)folk for good decisions made decades ago ,the Toffs ask the sensible to pay more to help those who failed or even refused to help themselves. At a rough estimate Cameron has just lost himself 4 million votes.

  49. 12/01/2013, JT wrote

    Ah yes, another classic failure of the Left, Boris – confusing motives with outcomes. You can bash the wealthy all you want. It won’t change the fundamental point that state pensions are unaffordable.

    I for one do not wish my children and grandchildren to be indentured to pay for the unaffordable promises of cowardly politicians. We shall see whether this is the vote loser you suggest. I rather suspect that most of the 4 million you cite didn’t vote Tory last time around.

  50. 12/01/2013, Boris MacDonut wrote

    #49 But JT we have to afford them as people are living to 80 or more.
    The 4 million are the ones who did vote Tory last time. That is the 30% of the 5.4 million public sector who did, the 60% of the private sector 1.2million and most of their spouses and adult kids.

  51. 12/01/2013, DAVID GREGORY wrote

    After 150 million what then 300 million, absurd.

  52. 12/01/2013, DAVID GREGORY wrote

    After 150 million what then 300 million, absurd.

  53. 12/01/2013, Boris MacDonut wrote

    #51 That’s what Malthus said in 1790 and since then World population has increased 8 fold or more. To adopt your argument one must assume we are at the highest point of scientific discovery and human evolution and that really is an arrogant assumption.

  54. 13/01/2013, David NYorks wrote

    I cannot imagine living in this country when it has a population of 100 million never mind 150 million. Also the majority of the children being born are by immigrants who if they ever became a large enough numbers would undoubtably change all the rules of this country and it;s religion. So child benefit needs o be cut over time as we a only subsidising what may quite possibly be not a nice place to live in the future.

  55. 13/01/2013, David NYorks wrote

    I cannot imagine living in this country when it has a population of 100 million never mind 150 million. Also the majority of the children being born are by immigrants who if they ever became a large enough numbers would undoubtably change all the rules of this country and it;s religion. So child benefit needs o be cut over time as we a only subsidising what may quite possibly be not a nice place to live in the future.

  56. 13/01/2013, JT wrote

    @Boris #50

    I’m afraid it’s not a case of ‘having to afford’ anything, Boris. State pensions and welfare are NOT affordable and whoever is in power will have to deal with that reality, regardless of which side of the political divide they occupy.

    This is already clear of course every time a Labour MP is asked which of the Coalition ‘cuts’ he or she would reverse. They understand very well that taxing the rich is futile because there aren’t enough of them to generate the cash required, and more borrowing will simply destroy any possibility of economic recovery. Welfare and pensions WILL be reduced because there is quite simply no alternative.

    I must say, though, your faith in the panacea a change of government will bring is heart warming and really rather quaint. Alas, we will continue to have leaders elected on cynical deceptions and false promises who will then proceed to accomplish by stealth what they didn’t dare tell us when running for office.

  57. 13/01/2013, Critic Al Rick wrote

    It has been said that: “Politics is the art of making the inevitable seem like wise human deliberation.”

    Presently, it would appear to me: “Politics is the art of making the inevitable look uninevitable.”

    Prolonged artificial sustainabilty of 99% of the status quo is uninevitable; nor is 99% of the status quo the result of wise human deliberation.

    It seems inevitable to me that one day it will appear to most that denying everyone of child benefit will be one of many such acts of wise human deliberation.

  58. 13/01/2013, JT wrote

    I agree with you CAR. The changes we’re starting to see are really nothing more than a return to the original Beveridge conception of welfare as a safety net (rather than the more recent model of welfare as an all-embracing system offering benefits to everyone for at least some part of his or her life (and which is self-evidently unaffordable)).

  59. 13/01/2013, Cynic wrote

    cal bent you describe will disappear, so that people all accept that they need not receive benefits as a quid pro quo for financing other people’s welfare receipts. They will start thinking about tax as an effective means of purchasing social peace in a humane way. (Continued below)

  60. 13/01/2013, Cynic wrote

    They will also keep paying attention to the public services that they finance. This is a strangely disregarded angle in the UK, where the upper middle class has, singularly, chosen for decades to use private education and healthcare, for example, but for someone used to any other developed country – bar the US – it is essential: the state should invest in areas that will not be efficiently (I.e. outcome vs. input ratio) provided by the market. Education, healthcare, and public transport, are three highly visible ones.

  61. 13/01/2013, Cynic wrote

    These two aspects (social peace and effectiveness of public investment) a key, as Asian countries like Singapore, Japan, South Korea and, yes, China, are showing everyday. I personally think that, in Europe, France is doing reasonably well on this count. The UK, conversely, is doing terribly badly with regards to financing the ‘commons of the Realm’ and basically is refusing to invest in its future; social peace is also fragile: the London riots should have been a wake up call, and if not then the rise of extremism (including a comment above) will create violent clashes in the near future.

  62. 13/01/2013, Cynic wrote

    In summary, the real question that high earners should ask themselves is not “why am I not getting benefits for my money” but rather “where is my money going?”. A country that fails to invest in its future is bound to regress, and the UK Government has managed a turn-around in the wrong direction remarkably rapidly. Well done, gentlemen.

    [apologies for the long post]

  63. 13/01/2013, Boris MacDonut wrote

    #56 JT. 400,000 people in the UK hold 25% of the wealth. It is they who should be targetted as it is they who have had a free run for 30 years at everyone else’s expense. And don’t give me hard work or talent as an excuse, it is an old boy’s network run by Eton Toffs. Without the other 63 million in the UK, the genuine strivers and grafters, this pampered elite would only be as rich as they were in 1980, but instead we are back to the inequalities of the Edwardian era. No wonder Downton Abbey is a success, it is a soap opera most Britons can empathise with.

  64. 13/01/2013, Boris MacDonut wrote

    #62 Cynic. All rich people in the UK get benefits for their money. They get peaceful(and well lit) streets to live on, security of tenure, protection from invasion, freedom of religious expression, an emergency fire service, paramedics, roads, railways, coastguards to look after their yachts,national parks, the worst criminals locked away, freedom of expression both political and indeed sexual. Which bit do you suggest they stop paying for?

  65. 13/01/2013, JT wrote

    #63 Boris

    Ah yes, Boris, “taxing the rich” – that irresistibly glib Left-wing solution to everything. Unfortunately, the amount of money required to fund government entitlement programmes is now so enormous that even very large increases in tax on the wealthiest 400,000 wouldn’t make present and projected levels of government spending affordable.

    And as for the rich having had “a free run for 30 years at everyone else’s expense”, you display a fundamental ignorance of basic economics. The amount of wealth in an economy is not fixed so that one person having more means that somebody else must have less. Laughable.

  66. 13/01/2013, Blue wrote

    “The general opinion is that the changes are a shambolic disaster. But look at it like this and they are devilishly clever. I’m impressed.”

    Without doubt, one of the most ridiculous comments I have ever read on this site. No wonder we’re in such a mess.

  67. 13/01/2013, Boris MacDonut wrote

    #65 I assume you believe the rich are not massively richer than they were 30 years ago then. As they have a quarter of all wealth I believe they are ripe for taxing very heavily indeed.

  68. 13/01/2013, Romford Dave wrote

    a backdrop for the IMF to work with.

    No such treasure now, unless you count the £3.5T of property we can offer up as security, we can’t even count on continued membership of the EU as a back door route for American & Asian companies products into Europe. If people thought our manufacturing sector had disappeared before, wait until Johnny foreigner pulls the plug on their EU storage facilities.

  69. 13/01/2013, Critic Al Rick wrote

    @65. JT

    Thanks for your support @58. but re.:
    “… one person having more means that someone else must have less. Laughable.”

    So, if the country as a whole is richer now than it was 30 years ago, how does that extra wealth manifest itself and where is it coming from?

    Balance of Payments Surplus – uh oh

    Lower overall Debt – uh oh

    Increase in ‘Family Silver’ – uh oh

    The UK as a whole is poorer. The rich have gained, if not at the expense of the rest, at the expense of debt taken on by the rest and via virtual asset stripping. And some individuals are getting even richer as the UK gets further and further into Debt and whilst assets are stripped to the bone.

    Shame on the greedy amoral b******s.

  70. 13/01/2013, Boris MacDonut wrote

    #69 Rick .Potty mouth.

  71. 13/01/2013, Critic Al Rick wrote

    Boris, I thought I was supporting your argument concerning the rich getting richer.

  72. 13/01/2013, Boris MacDonut wrote

    #71 Rick. I didn’t say you weren’t. Only that you have a potty mouth.That said most of the rich I have met are greedy and a lot have few morals. One fear I have will be social climbers and pushy show offs who will relish letting everyone know they don’t qualify for Child Benefit, or worse still agreed to forego it…..,now they don’t need to ask “how much do you earn? Even worse will be those middling types who won’t admit to getting it out of shame.
    My own father now qualifies for pension credit at a ripe age over 80, his first words were “don’t tell a soul”. The Tory press have so stigmatised a payment to which he is fully entitled. He also refuses to apply for council tax reductions which he qualifies for as he thinks they are not for the likes of him!

  73. 14/01/2013, Barkingmad wrote

    Boris says: “That said most of the rich I have met are greedy and a lot have few morals.”

    Yes of course and all the poor are generous, salt of the earth, hard working folk. Tax the rich, tax the rich he cries! Until you realise that taxing more discourages work, encourages evasion and typically reduces overall tax revenues. The problem is Boris would probably rather poke out his own eye than admit that reducing taxes can actually increase tax revenues.

  74. 14/01/2013, Barkingmad wrote

    … and increasing tax revenues benefits everyone.

  75. 14/01/2013, Boris MacDonut wrote

    #73 &74 You are living up to your name. It’s not about maximizing revenue, it is about fairness. If the maximum revenue were assured by letting millionaires off tax altogether would that be justified?

  76. 14/01/2013, Roadrocket wrote

    I wonder how many of the 500,00 are Buy to Let landlords. There’s a rich seam of cash for HMRC to collect here. Even being on a fixed and predictable income I still have to self assess due to my property interests. Maybe MSW is right and it will expose people such as these.

  77. 15/01/2013, Barkingmad wrote

    @Boris – “It’s not about maximizing revenue, it is about fairness. If the maximum revenue were assured by letting millionaires off tax altogether would that be justified?”

    Depends how you define fair. If someone chooses to work 5 days instead of 3 and it pushes them into a higher tax bracket for that harder work – is it fair? If you drop the higher rate of tax from 50% to 45% and you increase tax revenue, then drop it from 45% back to 40% and increase it again – how is that not a good thing for the poorer in our society who are more likely the beneficiaries of this extra tax revenue?

  78. 15/01/2013, Barkingmad wrote

    @Boris – it is you who are out of touch – you suggest “It’s not about maximizing revenue, it is about fairness” – if you can increase tax revenues from the richer in our society by reducing the rate at which they are taxed how is that not a good thing?

    The problem is you are happy with the idea of a guy who chooses not to work having a 40″ telly but not if the guy working and paying for the benefits the first guy receives can still afford a 50″ telly.

    Higher taxes discourage work, encourage evasion, discourage growth, will cost jobs and investment and make matters worse. In Boris Land if there is no reward for working harder – why would you – but then if everyone can be as well off working or not – why work. Then where do you end up?

  79. 18/01/2013, Boris MacDonut wrote

    77&78 B Mad.You didn’t answer my question, but instead attempt to libel me. Where have I ever said I am happy for folk not to work and have a big TV? And why do you put his in quotation marks. I never said this and to my knowledge neither did anyone else on here.
    It is about fairness and why is it not fair for someone earning £2 million pa not to pay nearly 50% in tax?

  80. 18/01/2013, Barkingmad wrote

    @Boris – you question was “If the maximum revenue were assured by letting millionaires off tax altogether would that be justified?” – seems a bit extreme – not sure anyone has suggested anyone being let of tax altogether – but if increased tax revenues means it is better for everyone even if some people pay a lower tax rate (although probably increased tax revenue) cannot see too much of an issue there?

    You would appear to support taxing people more even if it resulted in less tax revenue which seems even more bizarre.

  81. 18/01/2013, Barkingmad wrote

    The part in quotes (i.e. “It’s not about maximizing revenue, it is about fairness”) was copied from your post number 75.

    Surely it’s all about maximising tax revenues rather than just the specific rate high earners are charged – charge 100% and you will earn no revenue from it as no-one would work. There is a level where increasing the tax rate results in less revenue and vice versa.

  82. 19/01/2013, Boris MacDonut wrote

    #80&81.No. I do support taxing certain people more even if it results in less revenue. It is not about maximising revenues.it is about fairtness and not letting the rich dictate to everyone else wht they are prepared to give up. We fought a Civil war in thuis country and brought about a democracy.It is all about stopping the wealthy from taking control back…the money is secondary.

  83. 21/01/2013, Barkingmad wrote

    @Boris – “I do support taxing certain people more even if it results in less revenue.”

    Why just some people – surely the ultimate in your ‘fairness’ is when everyone earns the same – but then of course why would some people work harder / more than others or go through expensive training if you were no better off?

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