The Institute of Chartered Accountants for England and Wales has told the Treasury that the controversial plan to deny the benefit to families with a high earner "is seriously flawed in principle and in practice." In a confidential report seen by The Daily Telegraph, it urged ministers to rethink the plans when the Finance Bill is voted on by MPs later this month. The institute, which represents 116,000 chartered accountants, claimed that unless the Government found a more workable alternative, the tax plan could be an "operational and reputational disaster." The popular benefit is worth £20.30 a week for the first child and £13.40 a week for every sibling. It is taken up by 97 per cent of eligible parents. But from January, any family with a parent earning more than £50,000 a year will lose a proportion of their entitlement. Any family with a single earner on more than £60,000 a year will not receive it at all. The institute claimed that the plans were doomed because it involved combining the benefits system, which is based on households, and the tax system, which is based on individuals. This meant "using the tax system to claw back from one individual a benefit paid to another," it said. An additional 500,000 people would have to fill out self-assessment tax returns, the institute warned. HM Revenue & Customs would have to claw back wrongly paid child benefit through tax codes, but this could take up to three years, it added. If a couple separated in the interim it could be "impossible" to get the money back. Similarly, the new system could see taxpayers unwittingly fined for wrongly claiming the benefit because their partner's income exceeded £50,000. This could see taxpayers "penalised for failing to submit information they have no access to, particularly if the relationship breaks down," the institute said. The institute pointed to the perversity of changes that will allow a family with two parents earning £49,000 each to keep the benefit. It said: "Families in similar financial situations could be treated quite differently, undermining the policy's fairness objective and creating very high marginal rates of tax for some." It added: "Taxpayers could find their tax confidentiality breached and experience lower service standards while grappling with an even more complicated system. Their confidence in HMRC and the tax system will be undermined and there will be behaviour changes and planning to avoid the charge.