Confidentiality concern as child benefit scheme could require disclosure of income details by HMRC
PUBLISHED:
14:24 GMT, 19 May 2012
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UPDATED:
14:30 GMT, 19 May 2012
Couples receiving child benefit should be prepared to have financial information revealed to their partners by HM Revenue & Customs (HMRC).
It is a breach of the right by an invidividual to have their private tax affairs kept confidential, critics say, but HMRC defends the change of policy which will come in along with the new tax on child benefit payments next January.
It says a 2005 Act of Parliament gives it the necessary authority.
Partners: 'The individuals should voluntarily exchange information as the first option' says Chas Roy-Chowdhury, of the ACCA tax body
Information which HMRC can reveal will include whether a partner's income is over the 50,000 threshold – when the extra tax kicks in – or whether they receive child benefit for their children.
Under a clause of the 2005 Commissioners for Revenue and Customs Act it claims the rule against disclosing taxpayers' information does not apply if it 'is made for the purposes of a function of the Revenue and Customs'.
'In this instance the policy change to child benefit for those with income over 50,000 necessitates disclosure of one claimant's information to the other,' a spokeswoman explained.
'If this disclosure were not made, HMRC would not be able to administer child benefit in accordance with the policy.
'Consequently s18(2)(a) CRCA 2005 is a sound legal basis for HMRC to disclose,' she added.
The legal changes necessary are in the current Finance Bill being considered by Parliament.
Chas Roy-Chowdhury, of the ACCA tax body, told the BBC: 'From what I can see, the legislation does give them the right, but only in very narrow circumstances, where other avenues have been exhausted – and I don't think that has happened.'
'The individuals should voluntarily exchange information as the first option, and only then refer to the Revenue as a last resort.'
The new child benefit tax will be levied from 7 January 2013. It was originally announced by the coalition in 2010 and confirmed in this year's Budget.
About 1.2 million people are expected to have to pay more, and letters will be sent to all those potentially affected this autumn. The levy will be collected via the income tax self-assessment system.
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