"Child benefit chaos engulfs Tory MPs"
Posted: Sun Jan 06, 2013 4:03 pm
Downing Street aides last night ordered Tory MPs to contact tax chiefs immediately to prevent them being caught up in the child benefit cut fiasco.
Hereditary millionaire George Osborne and family
Alarmed by reports from Whips that MPs with children do not understand the new system or how they will be affected, aides told Tory MPs to phone a special HM Revenue and Customs hotline to advise them.
The £65,000 salary of MPs puts them well over the cut-off point for child benefit changes which take effect from tomorrow.
But the complexity of the system means that in theory, some MPs could use extra pension payments to argue their ‘adjusted salary’ for child benefit payments is below £60,000, allowing them to continue receiving child benefit.
The loophole arises because MPs can choose how much to pay towards their so-called ‘gold-plated’ pensions.
The confusion among MPs, who voted through the benefits changes, underlined the chaos across Middle England as couples struggled to work out how they will be hit and how to avoid losing out unnecessarily, without breaking HMRC rules.
The Number 10 panic came as George Osborne revealed that he and his wife have told tax chiefs to stop sending them the money for their two children Luke and Liberty. Until now, the Osbornes, said to be worth up to £4 million, have received £1,752 a year.
But the Chancellor disclosed that he and author wife Frances have told HM Revenue and Customs that they no longer wish to receive the benefit. Had they failed to do so, he would have faced having to join thousands of other breadwinners hit by the child benefit cut who will have to fill in complex forms and pay back the benefit in extra tax.
