MSE News: Higher rate tax payers to lose child benefit

smiths84

Kitten-B wrote: »

Definitely the case (under current rules anyway). And it is what anyone on the borderline will do - wonder has George O calculated that is his £1bn savings? Somehow I doubt it; have an inkling he's not the sharpest tool in the box.

I think it will work with buying childcare vouchers too - that can push your gross salary down by the max of £2,916.

The part I hate the most about Georgie's idea is the ridiculous marginal rate of 'tax'. Why would anyone accept earning £1 more (58p net) will lose you an average of £1,700 (based on 2 kids) a year? It's nonsensical - especially when the pension scheme / childcare vouchers is an easy fix.

It's a sloppy immature plan.

yes you must be right on the childcare voucher thing. My basic salary is over 44,000 but my taxable pay is well below that because i pay so much in pension contributions and childcare vouchers. Combined with my extremely low chance of pay rise/promotion and I reckon I'll be ok until Labour get back in!

loll01

Felt like I had to reply to this thread. My husband went into this 40% tax band last year through working overtime. He has not had a pay rise for over 2 years now and I work for the local authority and earn around £400 per month. We have 2 children and the oldest is from my first marrigae we should be getting £350 per month from my ex-husband but we only get £50 as his employer is foreign. My hubby works for a software house and through the recession local housing authorities were pushed to the limit with social housing, which in turn required my husband to upgrade computer systems out of usual work hours and many weekends away from home. The benefit was a fairly secure job and some extra cash. Now we have lost our tax credits of £40 per month because we were honest and were just over the limit. However what I really get angry at is people like a neighbour of ours, married couple, neither of them work, full mobility car as he is agoraphobic and they have just had twins bringing the total number in the family to 9. Now I don't begrudge anyone anything but to think that people like this have no intention of working and yet through our hard work we are being penalized. So basically they get the same as us in benefits, housing benefit, free school meals, free eye tests, free dental care, free milk, fruit and veg vouchers, free car, tax credits, why? because we have worked hard.

JimmyTheWig

I'm not saying that the situation is ideal, loll01, but I don't think that you can say that looking after 7 children (especially if one of the parents has a disability) is not working.

jlpike

I have always had an interest in politics but havenot been overly passionate about it but in recent years there have been a lot of things that have made me very angry. They just spin things to appear like they are good idea's and this is another good example.

Lets remove tax loopholes for the rich and cancel childcare vouchers. The word loophole is very emotive and makes you think about some banker earning 7 figures cheating the system when the reality is it is something used by real people to make it worth going back to work. The result of this will be millions of parents who stay at home to look after kids because work will not pay and HMRC will lose Billions.

This CB fiasco is exactly the same. Lets tax the filthy rich to support the poor. This all sounds very popularist but when you look at the detail and the effects it is absolute rubbish.

Exactly the same with the tripe they came out with for the 10p tax thing. A mistake - !!!!!!

I am genuinely quite scared with the level of incompitance at the treasury. Surely they can not all be stupid people or are they too scared to tell thier new boss in the cabinet that there new master plan is utter garbage.

jlpike

JimmyTheWig wrote: »

I'm not saying that the situation is ideal, loll01, but I don't think that you can say that looking after 7 children (especially if one of the parents has a disability) is not working.

Id rather work a 80 hour week doing hard labour than look after my 2 full time.

Love em to bits though but 7 days a week, id go mad. Mind you at least when the GIRO is cashed id be able to get out of my face on cheap booze and pretend they are not there:D

lady_divine

dazza.mk wrote: »

Ignoring the fairness of the cut, I do like the incompetence of Osborne to advise Higher Rate tax payers to stop claiming......

Avoids the fact that in households where 1 parent is a full time housewife/househusband that by stopping claiming they'll lose Home Resonsibilities Protection / State Pension Credits for looking after the children!

well that's what you get when you have a history graduate with neither qualifications n
or experience in finance as chancellor of the exchequer. I wonder how he got the job?

Dorastar

Just a query and don't know if anyone here might have the answer. Since I work in education my pension is all deducted from my pay already - I am sure they will clobber me for more in the October review - I don't know if I can then pay into something else to reduce me below the £44000 threshold (I am £500 over it atm) or whether this loophole is only open to people who pay into private schemes. I have a nasty feeling there will be something that says 'sod off' in my case - but then I have this feeling every time Mr Cameron opens his mouth at the moment.

Armada_2

Kimitatsu wrote: »

Armada wrote: »

I detect your jealousy of others and financial dependency on CB.
Is it right that people should be dependent on state benefits?

Which would you soon have CB for a ‘logo’ for a school uniform or money for the Health Service...CB is only for children, the health service is for ALL irrespective of age?

These are not my choices.......they are the governments.......there is no question which you would choose..Is there?

83% of a poll in the Sun newspaper agrees with what the government proposes...So I think you are in a minority.
This is despite criticism that a two-parent household earning £43,000 each will keep the payout, but a single parent earning £44,000 will not.
:rotfl:
:rotfl:
:rotfl:

julie2710

ajaxgeezer wrote: »

Where are you Julie? I'm not picking a fight or anything (honestly!), but a friend of mine is on exactly the same salary as me (just under 21k - I'm not coy) and manages to pay her mortgage on her house, bills, feed/clothe her kids and live a decent(ish) lifestyle. I know she gets some government tax credits to top up her salary, but it sure as hell doesn't amount to the nett equivalent of £23k gross. We are in the West Midlands. It's a deprived area, but if she can do it, I'm wondering what the differences are.

I'm not coy either about what I earn, I'm on £43K but have a company car as well - nothing flash a Zafira to carry my boys around in - diesel with an eco flex engine to save on fuel. The P11d value will push me over the limit. I live in West Sussex near Chichester so housing costs are high. I also have 2 very young boys so my childcare costs are just under £80 PER DAY!!! My mortage is about £1K per month, because of my marriage breakup I have been left with an additional £40K on my mortgage which went in to setting up my at the time husband's business - I have no hope of regaining that money. If I sold and downsized I would be no better off in cash terms as my mortgage is currently on an interest rate of 0.87% - lifetime tracker! So a move would mean a new mortgage and a much higher interest rate. To rent even a 2 bed property in this area I would be looking at £700 pcm at least! I don't really go out, we don't spend extravagantly, don't have sky or pay for broadband or any of the other stuff that people take for granted. I really really wish that things were cheaper for me but with childcare and a roof it means that the WFTC and CB I currently get is what keeps my head above water!

I know you're not trying to pick a fight but I just find that sometimes people look at one figure, see two kids and assume you made a life choice. Like I said, I'm an intelligent woman which is why I'm managing to keep my head above water, hold down a demanding full time job and raise 2 boys, but tbh despite my best efforts and everything I have paid into this country since I left school the government seem determined to ensure that people like me sink!

mesgna

In April 2011 the 40% tax threshold is going to be lowered so anyone earning more than £42375 (not £44000!)will lose their child benefit. This is because although they will be raising the personal allowance from £6475 to £7475, the government didn't want the higher rate tax payers to benefit. So, double whammy, not only will higher rate tax payers lose the CB but more of their pay will be taxed at 40%. The government seem to have kept that one nice and quiet!

By the way, I am a stay at home mum with 3 children whose hubby is just a fraction over the current higher rate limit and, yes, I am now going to have to to find a job to make ends meet. We live in a modest house, have 1 old car, don't smoke, don't go out, drink very little and haven't had a holiday for 2 years. The government should look at total household income and not penalise stay-at-home mums.