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Benefit cut is legal, Treasury insists

Benefit cut is legal, Treasury insists
The Treasury has insisted that its plans to remove child benefit for middle-income families are "fully compliant with EU law" after the Institute of Chartered Accountants in England and Wales questioned their legility.

The ICAEW claimed that the proposals may be "discriminatory" because some European Union citizens working in Britain will not have their payments reduced under the new system.

From January, any household where one person earns more than £60,000 will lose entitlement to full child benefit. But some EU citizens working in Britain remain part of the social security system in their home country, meaning they could go on receiving family benefits from that nation.

The Treasury today hit back at the claim that its plans were unlawful.

A spokesman said: "We are clear that this legislation is fully compliant with EU law. Anyone who receives (or whose partner receives) child benefit in the UK and is resident for tax purposes will be liable for the charge whether they are a UK citizen or a migrant worker.

"Other countries may pay benefits to their citizens who are resident in the UK, but that does not affect the UK Parliament’s ability to legislate."

David Heaton, the chairman of the tax faculty at the Institute of Chartered Accountants, had said the move could put British workers at a disadvantage relative to their European colleagues:

"You could find yourself in a British office, sitting next to a colleague from elsewhere in Europe who is paid the same as you, has the same number of children as you and is receiving benefits for them, but who is not facing the same tax charge from HMRC as you. That is discriminatory."

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