Child benefit cuts could spark employer reviews, expert says

An expert has claimed the government's decision to cancel child benefits for families earning more than £44,000 a year could prompt British businesses to review their own provisions.

According to Aiden Coloe, partner and chief of LCP Employee Benefits Consulting, workers currently receiving child benefit will be left with £4,000 to make up if they are given a pay rise which takes them into the higher tax rate.

"The child benefit cut is another prompt to take action, including reviewing benefit strategies for those employees who creep into the higher rate tax bracket," he explained.

Mr Coloe added that some staff may choose to reduce the impact of the changes by entering into an arrangement whereby their employer pays pension contributions in exchange for a cut in taxable earnings.

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The government's plan to scale back child benefit, which was outlined at the Conservative party conference in Birmingham this week, has triggered a fierce media and public debate.

Posted by Hayley Edwards