Clause 3 - Claims
Tax Credits Bill
12:00 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
The paragraph to which the amendments refer follows an income tax definition that may work satisfactorily for the collection of tax but is unnecessarily woolly for the paying out of taxpayer's money to others in tax credits. What does the phrase ''likely to be permanent'' mean in relation to separation, and how will it be quantified? The definition as it stands provokes argument and debate. More specifically, how does the paragraph interrelate with the rest of clause 3(3), relating to couples? My point is that cohabitation fraud is endemic in any system that pays more to couples. It has been a nightmare to police in the past, and it would be more sensible to have a much clearer definition of when two people are a couple and when they are not. The amendment sticks with the clear legal definition that separation is only separation under a court order.
The Liberal Democrat amendment No. 81 gets at the same point and tries to address it with a more specific definition than the current one, by using the phrase
''members of the same household''.
The current definition will be an encouragement to fraud and an almighty nightmare for the unfortunate staff in the Inland Revenue who have to administrate it and judge whether people's separations are permanent. It will lead to a relative worsening of the problems and a potential shambles.