Child benefit to be scrapped for higher rate tax payers from 2013

LilacPixie

WestonDave wrote: »

I wonder if this is a bit of a smokescreen. Firstly the fact that they will continue paying it to all parents and then expect higher earners to declare it on their tax returns to have it deducted leaves a door open for massive evasion (not avoidance as technically it should be being paid back) - question as to whether that will be followed up given that a lot of higher rate payers don't in fact have to complete a tax return.

Secondly I think this is a first step towards canning it altogether as part of a trailed wider change to the benefits system that gets rid of all these different benefits and allowances in favour of a single credit system - hopefully one that contains less incentive to keep producing kids to get more benefits and bigger houses, and is also hopefully focused around ensuring that benefits cannot be better than earning even at low rates. (So benefits are equivalent to less than earning minimum wage plus credits). They can't get rid of CB altogether without breaking a manifesto promise, and they are already talking about spreading the benefits reform over two parliaments to spread the cost - hence why this is just a halfway stage at this point.

Thirdly I think this may be a softner up to hammering down on other benefits - on the basis that if anyone complains about cuts in other benefits they can point back to this proposal as being one that hits the rich.

On that basis I think we have to wait and see what the overall package is by 2013 (or even 2015) and also see if the two income issue is addressed in part by allowing transferrable tax allowances within married couples.

No idea. HMRC currently deal with child benefit and income taxso surely it your be easier to just deal with it in the bac office so to speak. I wonder what implications this will have for the PAYE system, at the moment unless you change jobs HMRC has no idea of what tax you pay until your employer does an end of year return. So will we be in a situation where child benefit needs to be claimed back at end of tax year?

AMILLIONDOLLARS

Sorry if this has been answered before, Is this joint income of £44k or just one person earning that amount? So say a couple, the partner earns £20k and the man on £30K does the benefit ceases.

Thanks

AMD

The_White_Horse

RenovationMan wrote: »

Definitely not alone. I would also add that I think its disgusting for someone in an affluent family to pick apart the benefits paid to a family on the breadline and claim that its 'unfair'. If they are so convinced its a paradise for low income families, then perhaps they should give up working?

or the low income earners can stop having kids.

either we all get it, or no one gets it.

StevieJ

drc wrote: »

I'm going to encourage my OH to only work 9 months of the year to keep his income out of the higher rate bracket. That way he pays;

a) less tax and NI
b) we will still be entitled to child benefit
c) me and the kids will see more of him.

So much for the coalition's promise of making work pay.

Wait a minute, so hubby is going to work less so you can claim child benefit, I thought you didn't agree with benefit scroungers?

chucky

Graham_Devon wrote: »

You seen labours response?!



The most vulnerable are now higher rate taxpayers?!

Looks like all parties aint thinking things through!!

Labour are rubbish, actually worse than the Tories and Lib Dems.

The Tories and Lib Dems are just above rubbish, just crap.

Graham_Devon

StevieJ wrote: »

It doesn't make sense, Osborne says the alternative ('i.e. to make it fair) would involve a complex mechanism of means testing, then the next minute he says that higher rate tax payers will be expected to declare themselves whether they are entitled to child benefit. Surely they could declare themselves that they had a household income above a certain figure. Anyone think this is joined up thinking?

Oh this gets more complicated by the second.

So the family DOES have to declare it themselves. Right, well that makes more sense.

Secondly, it looks as if they will still receive the benefit, but it will be taken back off them through tax codes.

So lets take Carol...hope she don't mind. Husband earns more, so he (or she) will have to declare this somehow for CB purposes. Carol will then still receive the benefit, but husband will pay more tax?

And this isn't complicated?

Is there REALLY only 1.2m families who claim CB and whereby one person in a couple earn enough to pay 40% tax? Blimey. House prices are too expensive.

ukcarper

carolt wrote: »

Fair point - I took it as 18K as gross - but can't see the disparity being huge.

My point was that those on 18K, whom are quoted by George Osborne specifically as justification for the changes - his 'it isn't fair to expect a family on 18K to pay from their taxes towards benefits for those earning 50K' - may actually be earning virtually the same as the family with one earner on 44K and one scraping together a tiny mount of income through part-time work - eg typical working family I know (and I'd include my own family in this).

How does this reward hard work? Why bother trying to progress in your career or take on extra hours, if you're just going to be penalised for it.

It's clear - under the Tories, work doesn't pay.

Went through twice 2kids
Earning £23k take home £18k get roughly 10k benefits = £28k most of that LHA
Earning £45k take home £33k + £2k benefits mostly child benefit.

Work pays to tune of over £100 per week

chewmylegoff

carolt wrote: »

We've discussed this before - the child benefit doesn't pay me, it pays them - you received child benefit as a child and now pay it back through your taxes. So will my children repay their early 'loan' of child benefit through their taxes when they're older. The reason they don't do it now is because they're small children and in this country mercifully we're civilised enough no longer to expect small children to work up chimneys etc to pay their own way.

you might have "discussed" this before, but it doesn't make it correct. it is a nonsense construction and doesn't justify subsidising higher earners who can well afford to bring up children.

If you imagine that bringing up 3 children costs less than the amount I get in child benefit than you're clearly living in cloud cuckoo land. :rotfl:

i think the point here is that they're your financial responsibility, not that of the state. the state should provide a safety net - i.e. ensure that children don't starve just because their parents are recklessly irresponsible.

i am sure it does cost far more than £2.5k to bring up 3 children. however, it's not the state or the taxpayer that is bringing up three children. it is you.

chucky

bendix wrote: »

Am I the only one who thinks it's rather shameful that this post is full of reasonably affluent people - certainly not people on the breadline - who are feverishly working out what this change to the benefits system means to them?

no you're not the only one.

it's people milking the system to the max. very similar but on the same level but the same logic of those benefit scroungers who milk as many benefits as possible.

LilacPixie

chewmylegoff wrote: »

i do find the fact that it's only targeted at higher rate taxpayers rather than being on the basis of household income to be a bit odd.

yeah bit odd.

2 x £30k = take home of £45,250pa
1 x £60k = take home of £41,700pa

so you're already paying £3.5k more in tax before you lose the benefit. doesn't really make that much sense, although i suppose you could argue that the 2 x £30k are likely to have higher childcare costs.

I am presuming it is because the cost implications of a system that takes into account joint income outweights what savings the government hope to make.

I do find it incredibly bizzare that with a joint monthly take home of around £3500 after tax NI and pensions that once 3rd bump arrives we will get £2500 in child benefit about £190 every 4 weeks. I just cannot get my head around the fact that a similar 3 kid 2 parent family but with one person earning 44500 so a take home of 2700 before pension would get zero.

Surely there must of been a more uniform way to cut it. TBH I always thought with our income and almost 3 kids we lose it so i'm very very surprised that isn't the case.