Tory MP Liddell-Grainger fears benefit tax 'disaster'

A Tory MP has warned the effects on the tax system because of the changes to child benefit are a "disaster waiting to happen".


Ian Liddell-Grainger, the Parliamentary All Party Tax Group chairman said the tax authorities would not cope.

If a claimant or their partner earns more than £44,000 a year, the benefit will be lost under the plans.

But if taxpayers will continue claiming the benefit, this will then be clawed back through extra tax.
Some of the people who pay tax through Pay-As-You-Earn (PAYE) will continue claiming the benefit, which will then be reclaimed by HM Revenue & Customs (HMRC) through extra tax from them or their partner.

'Don't blame me... blame Gordon': Osborne attacks Labour 'snipers' as he warns everyone will pay for his 'bloodbath' Budget

Osborne insists economy cuts are 'tough but fair'

FTSE down 40 points to 5207 on opening

Two-year pay freeze for public sector workers earning over £21,000

Child benefit frozen for three years and tax credits cut

Corporation tax cut from 28% to 24% over four years

Capital Gains Tax hiked to 28% for top-rate taxpayers

Income tax threshold raised £1,000 to £7,495

Pension link to earnings restored or 2.5% rise from next April

Whistlestop tour: George Osborne did a series of interviews today to defend his emergency budget

George Osborne today revealed the agonising decisions behind his 'bloodbath' emergency Budget as he faced a backlash from ordinary families stung by his tax hikes.

The Chancellor insisted that he had been forced to raise VAT and freeze child benefit because of the 'massive mess' the country's finances had been left in by Labour.

Millions of middle-class families will bear the brunt of his emergency Budget, losing tax credits, facing a three-year child benefit freeze and paying £500 a year more in VAT.

But Mr Osborne today defended his decision to slash £11 billion from the annual welfare budget and said he had been left with no choice but to take 'tough but fair' decisions.

'It is not because I want to do these things, it is because this country faces a very, very serious debt problem,' he told GMTV.

And Mr Osborne said it would be better if Labour could come up with something constructive instead of 'sniping from the sidelines'.

'The damage to the economy, the people losing their jobs, will come if we do not sort out our problems in this country, and the welfare bills have got out of control,' he said.

'The hole in the public finances was so great and the debts were so large, and people at home know, if you have got a debt problem, you have got to deal with it.'

The Chancellor was forced to listen as he was played angry messages by GMTV viewers, worried by the decision to freeze child benefit.