300,000 famalies in the dark over Child Tax Credit

HMRC has admitted that it failed to contact around 300,000 families about imminent changes to child benefit payments that could see them lose the valuable subsidy.

The taxman had previously said that it would contact 1.1m people to alert them to the fact they will lose the right to claim child benefit from Monday, when it will be means-tested.

The letters were set to tell better-off families that they should either opt out of the system or have to repay the money through higher taxes. Just 784,000 people received the letters, leaving around 300,000 claimants uninformed of the changes.

Under the new rules, anyone now claiming child benefit will have to fill in self-assessment tax returns or face the prospect of being fined.

From 7 January, families with one parent earning over £60,000 a year will lose the right to the benefit, currently £20.30 a week for the first child and £13.40 a week for each subsequent child.

Families where one parent pulls in between £50,000 and £60,000 will see the benefit reduced on a sliding scale.

But in a bizarre anomaly, double income families where both parents earn up to £49,000 – just below the £50,000 threshold - will be able to keep their benefit, while households with one parent on £60,000 and the other not working will lose all theirs.

HMRC said it couldn’t alert everyone as it didn’t have all the information it needed for some people following changes to their relationship status, address or income.

An HMRC spokesman said: ‘There may be cases where people's circumstances have changed, for example their income may have increased or address may have changed, and we will not yet have up-to-date information. However, to ensure people know about the changes, we are also using extensive advertising, media and online activity, as well as written communication.

‘Our target audience will have seen the adverts five times on average, and there has been extensive media coverage of the change. Over 1m hits on the guidance section of the HMRC website and 100,000 uses of our online calculator show that the message is getting through.’