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

silvercar

I totally accept that for some it will be a difficult cut to stomach, made all the more difficult because the people who will lose it but need it most will be the people who possibly gain least from working and could claim a whole host of benefits and sit around doing nothing.

The fact that everyone has 2.5 years notice does mean that people can be expected to adjust their budgets accordingly.

Really2

Graham_Devon wrote: »

Hmmm, we aint had a decent argument for ages on this board. When are the Halifax figures out?

I don't know? I was on holiday last week, how did the Nationwide and LR do?

wherediditallgothen

In all fairness Carol, you & your family do have until 2013 to put contingency plans in place. So it's not as though you will be destitute next week.

MGCP

I must admit, until about a year ago I had no idea that higher rate tax earners were effectively paid for having children. Although now I know about it it seems a bit of a shame I'll never get to claim it (if I have kids) I guess I can't complain too much as it has never factored into my calculations!

It is interesting to see that the point which seems to be causing the most anger is not losing this benefit, but the thought that standard rate tax payers Bob and Jane next door on £80k between them might still be able to claim.

I'm sure it must tell us something interesting about human psychology that we are less concerned about being shafted ourselves as long as everyone else around us is getting shafted too. It reminds me of my young nieces, the "It's not fair!" cry is learnt from a very young age and gets trotted out on a regular basis. Clearly that sense of injustice stays with us as a defining part of our character throughout our lives. I wonder whether I was just a bit mean to tell them that actually life isn't fair, so they should get used to it, or was I imparting a valuable lesson which can be demonstrated with reference to tax legislation...

I haven't actually read all the (many) pages but I see StevieJ made the same point that is bugging me - why don't they require self certification from claimaints that their household income is not above £44k, with fines (or adjustment to their tax codes) if they are caught lying. It shouldn't be too expensive for HMRC to check against a representative sample against the individual's tax records surely?

StevieJ

MGCP wrote: »

can be demonstrated with reference to tax legislation...

I haven't actually read all the (many) pages but I see StevieJ made the same point that is bugging me - why don't they require self certification from claimaints that their household income is not above £44k, with fines (or adjustment to their tax codes) if they are caught lying. It shouldn't be too expensive for HMRC to check against a representative sample against the individual's tax records surely?

I did add a bit of leeway to account for child minders, above £55k

bendix

MGCP wrote: »

I must admit, until about a year ago I had no idea that higher rate tax earners were effectively paid for having children. Although now I know about it it seems a bit of a shame I'll never get to claim it (if I have kids) ?

Why is it a shame that you will never get to claim a benefit that you don't need?

Isn't it exactly the opposite? Wouldn't you feel a sense of shame claim a benefit that you don't need?

This is what worries me about modern Britain (and I don't mean you personally). The default starting position is that getting benefits is good, almost aspirational. It's not. It's a sign of failure - it's a sign that you're not willing to support yourself off your own efforts, and that you rely on the state to support yourself and your family.

Until that feeling of self-sufficiency, self-worth returns, the future is bleak.

The sentiment is compounded manifold when people feel no shame about feeling entitled to a benefit when they are - without question - middle class and/or high earners.

How can people not see that that is completely f****d up?

RenovationMan

wherediditallgothen wrote: »

In all fairness Carol, you & your family do have until 2013 to put contingency plans in place. So it's not as though you will be destitute next week.

Also in fairness, £2500 per year is a significant amount of money to replace in a family budget, especially after 40% tax has been taken off. A HR tax payer will have to earn an additional £4200 to make up for the loss of £2500.

lostinrates

bendix wrote: »

Why is it a shame that you will never get to claim a benefit that you don't need?

Isn't it exactly the opposite? Wouldn't you feel a sense of shame claim a benefit that you don't need?

This is what worries me about modern Britain (and I don't mean you personally). The default starting position is that getting benefits is good, almost aspirational. It's not. It's a sign of failure - it's a sign that you're not willing to support yourself off your own efforts, and that you rely on the state to support yourself and your family.

Until that feeling of self-sufficiency, self-worth returns, the future is bleak.

The sentiment is compounded manifold when people feel no shame about feeling entitled to a benefit when they are - without question - middle class and/or high earners.

How can people not see that that is completely f****d up?

As often happens Bendix is saying more forcefully what I think. I have long felt it unhealthy, and potentially vote skewing, that so many people were paying in tax to get it back in some form. While the majority are receiving a ''hand out'' whatever it was called...tax credit, child benefit, a vote for simplification and cost cutting was potentially a vote against oneself even in a comparatively small way that some feel this is. Further more it makes the system more expensive to administer and more complicated to navigate.

Ater a nights sleep I think I would favour furthering this to the suggestion some have had of eliminating the CB altogether and administering this in some other way. Personally I think I still favour raising personal allowances, looking at them across household, and letting people earning above that sort themselves out.

MGCP

bendix wrote: »

Why is it a shame that you will never get to claim a benefit that you don't need?

Isn't it exactly the opposite? Wouldn't you feel a sense of shame claim a benefit that you don't need?

This is what worries me about modern Britain (and I don't mean you personally). The default starting position is that getting benefits is good, almost aspirational. It's not. It's a sign of failure - it's a sign that you're not willing to support yourself off your own efforts, and that you rely on the state to support yourself and your family.

Until that feeling of self-sufficiency, self-worth returns, the future is bleak.

The sentiment is compounded manifold when people feel no shame about feeling entitled to a benefit when they are - without question - middle class and/or high earners.

How can people not see that that is completely f****d up?

Not sure I quite share your opinion Bendix (even though my original comment was slightly tongue in cheek). If I discovered that there is a universal payment made by the Government for having kids I would see it in the same way as a tax rebate. I could certainly choose not to request it. I could also choose not to pay money in a pension so I can recover the 40% tax I paid on it. I could also stop putting money into my ISA's in an attempt to contribute more to the public coffers than I am required to.

If my wife and I have no problem structuring our financial affairs to reduce the 40% we each pay on a chunk of our earnings, I'm not sure why we would see this any differently, other than the fact that it is labelled a benefit rather than a rebate for tax paid?

I'm genuinely interested in what the diffence is (assuming you see a difference)?

StevieJ

bendix wrote: »

Why is it a shame that you will never get to claim a benefit that you don't need?

Isn't it exactly the opposite? Wouldn't you feel a sense of shame claim a benefit that you don't need?

?

Don't be ridiculous, it is called optimising your income, I would call anybody turning it down.