The government's proposed reforms to the child benefit system would create effects that are "bizarre and economically damaging", the Institute for Fiscal Studies (IFS) has said.
Tax planning and non-compliance to avoid losing child benefit will reduce the government's saving of £2.4bn by £340m, the IFS said in its Green Budget 2012. The organisation has proposed three alternatives to the reform, which it said would prevent incentivising families to reduce their earnings in order to keep their benefits. The government has proposed to withdraw all child benefit from any family containing a higher-rate taxpayer. This will remove 1.5m families from the benefit altogether, although David Cameron has said the government is reconsidering its reforms after a publi...
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