The government is encouraging firms to pay peanuts

Tax and credits

Low income families with children will be unhappy to hear that child tax credit is on the chopping block as chancellor George Osborne looks for £12 billion of cuts

Cutting the benefit would save the government £5 billion a year but 3.7 million working families would lose out on around £1,400 a year – not an insignificant sum.

Under the plans, a two-child families with one parent working full time would see tax credit stop when earnings reach £28,847 rather than the current mark of £32,969.

The government argues that the plan will mean businesses, not the state, will shoulder more of the burden of employee costs. I understand this argument and I agree with it to a point but it does pose the question of why we have child tax credit and, expanding the argument, working tax credits at all.

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These government top ups are a huge subsidy for Britain's businesses who know they can pay the lowest amounts possible to employees because they know the government is going to step in and make up the shortfall.

Why does this subsidy for businesses, even those which are extremely profitable, exist in the first place?

It seems it is only there to let large companies pay poor wages to their workforce while giving to their shareholders.

One of the large problems with tax credits is that the companies that benefit from them aren't means-tested.

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While the workers are told they will stop receiving top ups when they hit a certain income level, businesses no matter how big are free to let the state – aka taxpayers – pick up the bill. This allows those at the top to get richer while the staff at the bottom have to rely more heavily on the state.

If businesses were forced to pay a real living wage we wouldn't need top ups in the first place. However, the business lobby is obviously against anything coming out of their pockets when they have balance sheets to think of, but if a business can't afford to pay its staff a liveable salary should it really be in business at all?

The government is strong-arming employers to take more responsibility for their staff but the fear is that companies won't step up to fill the gap to a liveable wage and we end up with people working for the same wages but their families scrapping by on even less than they had before.

Ten terrible tax excuses
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The government is encouraging firms to pay peanuts

HMRC has revealed the 10 worst excuses people have given for missing the 31 January tax return deadline. The excuses were all used in unsuccessful appeals against penalties for late filling and payment.

Top of the list was “My pet dog ate my tax return…and all the reminders.” It's the school homework classic that never gets old.

One taxpayer argued “I was up a mountain in Wales, and couldn’t find a postbox or get an internet signal.”

It’s not thought that he was up the mountain for the entire ten months - which would indicate a particularly slow ascent.

One person tried to get away without penalties by claiming “I fell in with the wrong crowd.”

Presumably this was some sort of anti-tax, paperwork-eschewing crowd, who ought to take full blame for the fact that you couldn't be bothered to fill in your form.

One of the most fanciful excuses was “I’ve been travelling the world, trying to escape from a foreign intelligence agency.”

It’s an impressive level of excuse, although it might make quite a dull episode of Spooks.

One person tried to claim “Barack Obama is in charge of my finances.”

It would clearly explain why the tax return was late, because Obama has probably been a bit busy recently.

In an excuse which seems to have come directly from ‘My Family and Other Animals’, one taxpayer said: “I’ve been busy looking after a flock of escaped parrots and some fox cubs.”
This taxpayer didn’t bother altering the excuse they usually use at work for missing deadlines and claimed: “A work colleague borrowed my tax return to photocopy it, and didn’t give it back.”

One taxpayer argued “I live in a camper van in a supermarket car park.”

While that could make online submission a bit tricky, it doesn’t fully explain why they weren’t able to complete a paper return or leave the van to find somewhere more suited to paperwork completion. Perhaps the supermarket cafe would have sufficed.

If in doubt, point the finger at your other half.

One person used the brilliant excuse that “My girlfriend’s pregnant”: presumably they weren't to blame for that either.

One person blamed the fact they had been in Australia - where computers and the internet presumably haven’t been invented yet.

Read more:
Working tax credits: a guide

Child tax credits: a guide

HMRC could confuse you into losing tax credits
Osborne Considers 5billion Poumd Tax Credit Cut
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