MSE News: Higher rate tax payers to lose child benefit

SurfBowlSC

Don't forget that from 2012, Child Tax Credits will be removed from families with incomes over £30k!!!!

While I partly agree with the Governments decision to remove the Child Benefit, their approach is completely ridiculous.
We get £134 per month for our 2 kids and more often than not, it's used to buy them clothes etc.
I am the sole earner in the house, with my wife being a stay at home mother. I currently am under the 40% threshold, but any pay increase of reasonable value and I slip just over that border.
As a result, we'll be worse off every month.
Why should I be rewarded for career progression with a bigger tax bill?

How then can it be justifiable to allow two working parents to keep their child benefit when they earn up to £43k EACH......???

I want a stable family environment for my kids, and we will be penalised for doing so. If I decided to move out, our kids may suffer emotionally, but we'd be financially better off!
One of our neighbours is already fiddling the system in that manner, even though we've reported them, but nothing's being done about it.

Two of our friends are a married couple, who bring home as much as we do, with only the wife working, and the rest being raked in on benefits, all because she DELIBERATELY only takes a low salary and he tops it up!

Ms_Sparkle

My husband is a higher tax payer, and this will affect us. We are by no means wealthy, we don't own a house, we have an old car, rarely go out and we certainly don't have lots of clothes and luxuries people on no to lower incomes have. I'm expecting our 3rd child, however I know people who live in bigger and nicer houses than me, have nicer clothes, cars, holidays etc than me and have much more disposable income than me yet don't work How is that fair!!!!!

I do agree that people who can't afford to have children shouldn't have them, and although it'll be harder losing the money we can cope. So why is it those that work hard struggle to afford kids, going as far as to not have children, when others have 4, 5 or even more get the luxury of having children and a house and a car etc. That needs to be addressed, not punishing people who work hard, work long hours so don't actually see there wives or children, even have to work away get punished.

Kitten-B

jlpike wrote: »

Yes but I think they will have the effect of reducing your taxable earnings. If you earn 45K but put 3k pa in a pension then your taxable earnings are 42k and you keep your CB.

You can do this with a private pension company pension (employer contributions) childcare vouchers or charity donations.

Also Taxable earnings include company car, private petrol, private health etc so you need to add the P11D value onto what you earn to get your taxable income then take off pensions etc.

I think this is the case anyway?

Thanks!

I was being a tad dim - didn't realise the hypens in your earlier posts were to signify minus signs. Blame the baby brain I think!

That's what I thought too.

SurfBowlSC

Agree with Ms Sparkle above.
Our benefit grabbing "separated", mother of 4 neighbour seems to have plenty of money for weekends out in London (she staggered home at 4 am yesterday).
We on the other hand have had one night out in 2 years!
We have a reasonable mortgage for our 3 bedroom house, we have one credit card with less than £1k on it, no other loans or anything, and nothing in the house is particularly flashy.
Holidays?! This year we had a week in a chalet in Norfolk, costing £120, and next year it's the same, but costing £60.

Hardly an extravagent lifestyle that people evidently think we may have.

I always end up justifying any cash spend to myself. I want a new xbox game, I trade in to reduce the cost, meaning the cash gets spent on what the kids need.

The people who try to do things the right way are always the ones who get punished for it!

jlpike

Personally I think this CB thing will be changed, they have not thought this though. Or they have thought it though and will change it in a few weeks "to be seen to be listening to people"

This is one of the stupidest things since the 10p tax thing which I when it was announced I could not believe.

It will be interesting to see what comes out in the detail as there is no way I can see this government fixing it so you are worse of my bettering yourself! That is just crazy!!!!!!!!!!

I know there will be lots of people looking at this earning 15k thinking anyone earning 44k should pay more and that is fine and I agree but please understand that is not the issue. It is that you can earn £1 more than 40% and be £2500 instantly worse off which before tax is around £5000 salary.

I also understand people who resent paying anything for other people’s kids and I can certainly live without the CB and don’t need other people to pay for my kids but make it an even playing field for everyone.

It is also ridiculous to say people spend £200 of CB on champagne or Fillet steak and should not have it. It all goes to the same pot so if I spend the CB on dinner money and kids clothes and spend £200 of my wages on luxury's it is OK. It is the same thing!!!!!!!!!!!

Jeff_Bridges_hair

liz-paul wrote: »

My husband is a higher rate tax earner & I earn nothing looking after our children. We are certainly not 'Rich' & have to budget for everything. We are going to struggle to replace the child benefit we will lose in 3 years time & one of the things that it currently pays for is payments into the kids CTFs which will probably have to stop. This is highly unfair imo; we have both worked hard & continue to work hard to have what we have & constantly we are being given the message that the harder you work for things you more you will have taken away from you. If my husband moved out & moved in with his mother then we would be so much better off financially. Isn't that the kind of message the government is trying to change?

Whilst i appreciate that you work hard looking after your children but it was YOUR choice to be a stay at homemother. Why should the rest of us have to pay for you to stay at home?

The Child benefit was never introduced so that you could do this - It was introduced so that people could clothe their children and was only really meant for the very poor so that they had clothes and shoes. Im just amazed that it is such a universal benefit. Though i agree that they should have made it household income rather then personal income but i still dont see why it should be paid to those who choose to shun work and be a stay at home parent.

Jeff_Bridges_hair

jlpike wrote: »

Personally I think this CB thing will be changed, they have not thought this though. Or they have thought it though and will change it in a few weeks "to be seen to be listening to people"

This is one of the stupidest things since the 10p tax thing which I when it was announced I could not believe.

It will be interesting to see what comes out in the detail as there is no way I can see this government fixing it so you are worse of my bettering yourself! That is just crazy!!!!!!!!!!

I know there will be lots of people looking at this earning 15k thinking anyone earning 44k should pay more and that is fine and I agree but please understand that is not the issue. It is that you can earn £1 more than 40% and be £2500 instantly worse off which before tax is around £5000 salary.

I also understand people who resent paying anything for other people’s kids and I can certainly live without the CB and don’t need other people to pay for my kids but make it an even playing field for everyone.

It is also ridiculous to say people spend £200 of CB on champagne or Fillet steak and should not have it. It all goes to the same pot so if I spend the CB on dinner money and kids clothes and spend £200 of my wages on luxury's it is OK. It is the same thing!!!!!!!!!!!

but you should NEVER EVER by relying on this benefit as a supplement to your income.

PamVegas

I think they have not thought this through or like a previous poster they are going to change it to be seen to 'listening to the people'. I will lose my CB as my oh is a high rate tax payer but as I've said I have taken a considerable cut to enable him to do the job he now does. I do not disagree with changing the cb policy but the way it is not based on household income is unfair as is not being able to offset my tax allowance against his should I give up work and be supported by him, when his wages would be taken into account with regards to benefits. We will be better off seperated in 2013 under this proposed system, is that what this government wants, an increase in broken homes?

2010

The minimum wage is a tad under £6 an hour, which equates to £12,480 a YEAR for a £40 hour week.

Maybe this should be the benchmark for CB to be assessed and all the £20k/£30k/£40k plus earners worrying how they`re going to manage should take a long hard look at themselves.

Years ago school uniforms could only be bought at certain shops and cost a fortune.
Now for a tenner you can go to Tesco and get the whole lot.

If people actually spent their CB on the children then I could maybe understand what the fuss is all about.
Most of the money goes on anything/everything EXCEPT the kids.

jlpike

Jeff_Bridges_hair wrote: »

but you should NEVER EVER by relying on this benefit as a supplement to your income.

I dont rely on it. I live in a very basic house worth just over 100k. I do not go on expensive holidays. I have virtually no debts other than a very small mortgage.

We delibereately did not stretch ourselves when others have so we could look after our kids properly. I will not be starving should HMRC take £140 per month away from me but if someone offered you £140 extra a month would you say no. Of course not!

It should not affect me anyway even if they proceed as they have suggested as I will pay a little extra into my pension to make sure I am under 40% as I am only just over it.

And no doubt that will make me a fat cat tax dodger:j