“The introduction of changes to benefits and taxes inevitably leads to complication and confusion. It’s right that HMRC take stock after the fact and the £1.8 million in refunds to families is welcome.
“However, the challenges around this complex system aren’t going anywhere. Claiming child benefit counts as a National Insurance credit, even when the benefit is wiped out by tax charges. If a mother is not working and does not claim child benefit she will lose rights under the state pension at a rate of £231 a year for every uncredited year.
“At the moment high earners who don’t think child benefit is for them need to make sure they always complete the child benefit: claim form (CH2) to retain NI credits. That seems counterintuitive and is probably the last thing on their mind when dealing with a newborn.
“Just to make things more confusing the 516,000 families who have opted out of the system are fine, so it’s just new parents who need to fill out the form. The Government needs to simplify its system so busy parents don’t have to spend hours trying to understand needlessly convoluted benefit rules and so it’s encouraging to see they are looking at the system and improve communication.”