Tax Credits Muddle!

melly1980

zagfles wrote: »

If you made contributions via your pay then the contributions should still have been deducted from your P60 income. The taxable pay on your payslips & P60 should have been after pension contributions were deducted. But (unlike salary sacrifice) NI would have been charged on your contributions.

If you contributed to a personal pension then you should have deducted conributions from your income see

Im an amature at this

Because I was in a salaried position with no variation I never read my P60. I simply declared my salary as what I knew it to be. I take it its too late to do anything about, it was for this years TC based on the year befores actual income (09 - 10)

melly1980

zagfles wrote: »

It's too early for child benefit as the technicalities haven't been announced yet (personally I think it'll be too hard and they'll abandon it - just like Gordon Brown did 10 years ago).

just one more question if you dont mind.

The proposal that they made would involve people declaring if they are a 40% tax payer or not. Now putting aside the technicalities, based on what you have said I would only be a 40% tax payer if after my personal allowance I then earned a further 35K. Would I be right in saying that on top of that I would be allowed to deduct a regular non-salary exchange pension as well.

Putting some numbers together, our family is single income (mine) and that income is 40K. A good salary yes but I have 4 kids. This child benefit thing will be a big hit.

Now come 2013 I'd expect to have pushed through the 42K mark and therefore would expect to be a 40% taxpayer. However my pension is 5% (or 2K). Are you saying that with my circumstances 42K doesnt equate to paying 40% tax because of the pension?

Cheers for any response. This thread has been most helpfull.

Ama

melly1980 wrote: »

just one more question if you dont mind.

The proposal that they made would involve people declaring if they are a 40% tax payer or not. Now putting aside the technicalities, based on what you have said I would only be a 40% tax payer if after my personal allowance I then earned a further 35K. Would I be right in saying that on top of that I would be allowed to deduct a regular non-salary exchange pension as well.

Putting some numbers together, our family is single income (mine) and that income is 40K. A good salary yes but I have 4 kids. This child benefit thing will be a big hit.

Now come 2013 I'd expect to have pushed through the 42K mark and therefore would expect to be a 40% taxpayer. However my pension is 5% (or 2K). Are you saying that with my circumstances 42K doesnt equate to paying 40% tax because of the pension?

Cheers for any response. This thread has been most helpfull.

The advise from our knowledgable payroll manager is that;
To pay 40% tax, your income less pension contributions and non taxable benefits (such as childcare vouchers) should be more than your personal allowance plus 35K.

melly1980

Ama wrote: »

The advise from our knowledgable payroll manager is that;
To pay 40% tax, your income less pension contributions and non taxable benefits (such as childcare vouchers) should be more than your personal allowance plus 35K.

A nice concise way of explaining something that I went "all round the houses" to explain

zagfles

Ama wrote: »

The advise from our knowledgable payroll manager is that;
To pay 40% tax, your income less pension contributions and non taxable benefits (such as childcare vouchers) should be more than your personal allowance plus 35K.

Yes. From what they've said it would seem that there won't be any means testing in child benefit itself - ie everyone will still have the right to claim it as now. But they will somehow take the equivalent off via tax returns for 40% payers. If so it should be fairly easy to avoid using pensions etc for those on the borderline. Unless they put something specific in place to stop it. May get details in the budget next week.

The big problem is independant taxation - you can't be taxed on someone else's income even your spouse's so how they get round this I don't know (this is what floored Gordon Brown's similar plan).

My prediction either one of 2 things will happen. Either they'll water it down and only withdraw CB where the claimant themselves claims it (ie in practice this would mean where both parents pay 40% tax). Or they'll abandon the idea completely and freeze/lower the HRT threshold instead.