Child Benefit for £44k single earner

snarffie

Hi,

I am married, but sole earner on over £44k, which I understand will be the cut-off point in 2013 for child benefit.

I currently salary sacrifice a decent chunk of my salary into my pension, so I don't sit in the higher rate tax-band and pay the standard 20% income tax.

For the purposes of child benefit, would it be seen in the same way, as my taxable income is not over £44k?

Anybody know how this would work?

Thanks.

zagfles

snarffie wrote: »

Hi,

I am married, but sole earner on over £44k, which I understand will be the cut-off point in 2013 for child benefit.

I currently salary sacrifice a decent chunk of my salary into my pension, so I don't sit in the higher rate tax-band and pay the standard 20% income tax.

For the purposes of child benefit, would it be seen in the same way, as my taxable income is not over £44k?

Anybody know how this would work?

Thanks.

No, nobody knows because the technical details haven't been announced yet. Search the forums, there's been loads on this. Personally I have my doubts it'll ever happen.

AnxiousMum

Would it make a difference if your non working spouse was to claim the child benefit?

zagfles

AnxiousMum wrote: »

Would it make a difference if your non working spouse was to claim the child benefit?

No - the govt's intention as announced was that if just one of a couple pay HRT then the couple would get their CB clawed back through the tax system regardless who claim it. It would nearly always be the case that the non working spouse claims CB for HRP reasons.

But this is technically difficult, as well as unfair, so maybe they'll go for some compromise like CB clawback only where the claimant pays HRT (in effect this would be where both parents are HRT payers), combined with another lowering of the HRT threshold?

JOHNGT

I they do decide to claw it back if one person in a couple is a HR taxpayer then yes a pension contribution or salary sacrifice will do the trick by getting you ack within the HRT threshold. Note that the point at which you pay HRT falls to £42475 in April 2011 (from £43,875 this tax year) so you may have to sacrifice more than you currently do. But, as the others say, the method is not set in stone yet, and they might yet back down.