He believed that the High Income Child Benefit Charge has been confusing and anomalous since the start. Much of this confusion arises as it’s often the person who’s not receiving the benefit who needs to file a tax return to pay the charge.
Mr Falvey continued: “Many people would accept that means testing the benefit is fine, but only if it can be done fairly and clearly. Currently, it is very hard to justify why a couple earning £45,000 each – or £90,000 jointly – can claim full Child Benefit payments, while a couple with just one earner on, say, £61,000 gets absolutely nothing.
“This is just one example which underlines why our tax system is in urgent need of modernisation.”
On their website, HMRC explained that anyone who has to pay the charge will need to pay an amount equivalent to some or all of the Child Benefit that they or their partner is entitled to receive.
The tax charge increases gradually for taxpayers with incomes between £50,000 and £60,000.