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Osborne challenged over tax for married couples
GEORGE Osborne is being urged to consider introducing a tax break for married couples to help address the “unfairness” of plans to cut child benefit from higher rate tax payers.
The Chancellor is coming under mounting pressure from Tory MPs to alter the plans, which are due to come into force next year and have been criticised for allowing a couple earning £80,000 to keep their child benefit while a single income household earning £45,000 would lose theirs.
York Outer MP Julian Sturdy is pressing the Chancellor to adopt the controversial transferable tax allowance, which was pledged in the Tory manifesto, to reduce the impact of the changes on married couples where only one person works.
“If we’re going to move down the route of capping child benefit at a certain level, my concern is there’s a lack of fairness,” he said.
“I think transferable tax allowances is something the Conservative party was talking about before the election and would bring a level of fairness back into the system as well as supporting marriage.”
With the budget weeks away, Mr Osborne is coming under renewed pressure to re-think the child benefit plans which he announced in 2010 as part of the coalition’s package of austerity measures.
This week Tory MP Christopher Chope branded the plans to means test the benefit – worth £20.30 a week for the first child and £13.40 for any more – as “absurd and ludicrous”. The move – which will deny benefit to any family where one parent is earning over £42,725 a year – is designed to save £2.5bn a year while still protecting poor families.
Mr Chope claimed the withdrawal would punish hard-working families and abandon the “dearly and long-held principle that we should have a universal benefit for families with children”.
Other Tory MPs harbour concerns about the plans because they would strip the benefit from a single income household earning just over the threshold but not from a two-income household where each earns just under the higher rate tax band.
A better-than-expected budget surplus in January has raised hopes the Chancellor may be able to address the issue in the budget.
Exchequer Secretary David Gauke said it was “right and fair” for ministers to “support hard-working families” and admitted child benefit was “a vital and substantial income boost”.
But he added: “It is vital we ensure all parts of society contribute to tackling the economic legacy this Government has inherited.”
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Saturday 26 May 2012
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