Child Benefit reduction letters sent

One million households will receive letters from the UK tax authority this week about losing child benefit.

Households where at least one person earns more than £50,000 will have the benefit effectively reduced or stopped.

Officials say it means as many as 500,000 parents may have to complete self-assessment tax forms. A flood of calls for advice is expected.

Ministers say the changes, which take effect on 7 January, are needed so the better-off help deficit reduction.

Letters will be sent to people who earn more than £50,000 who live at an address where child benefit is received to explain how their family is likely to be affected.

Child benefit currently stands at £20.30 a week for the first child and £13.40 for each child after that.

Under the new approach, families where one parent earns between £50,000 and £60,000 will have their benefit reduced on a sliding scale.

The change will cost families with three children and at least one parent earning more than £60,000 about £2,450 a year - the equivalent of a £4,000 pay cut.

And it will produce anomalies, such as in the case of two-earner households where both parents earn £49,000.

They will keep all their benefit, while others who have one parent on £60,000 and the other staying at home will lose all of theirs.

Hundreds of thousands of parents will have to complete a self-assessment tax form.

Accountants say they expect calls from people confused by the change, or looking to avoid losing benefit by legal means, for example, making additional pension contributions.