Child benefit to go in 2013?

jgcfmt

I have just recently reached the threshold to enter the 40% tax bracket and have been informed that my child tax credits will stop.
IN 2013 I will stand to lose another £2500 p.a. when child benefit goes for higher rate tax payers.
My wife is a stay at home mum so has no income and we really depend on that money.
I have heard that if you are just within the 40% bracket then it may be possible to hang on to child benefit payments from 2013 if you increase pension contributions or charitable donations.
Does anyone have any ideas or links as to how to do this? Also is there any indication as to what income will be used to assess the CB cut? will it be 2012 calendar year or 2012/2013 tax year?
Thanks
JGC

ffacoffipawb

jgcfmt wrote: »

I have heard that if you are just within the 40% bracket then it may be possible to hang on to child benefit payments from 2013 if you increase pension contributions or charitable donations.

Not sure it has to be "just".

Someone on £80k a year could salary sacrifice £50k (maximum allowable) into a pension so they only "earn" £30k as far as HMRC are concerned, well in basic rate tax territory and also child tax credits territory too.

So they keep their child benefit.

Actually, I know someone at work who earns £65k and salary sacrifices £32.5k into their stakeholder pension. So they have £32.5k as taxable earnings on their P60.

Oldernotwiser

If the OP needs CB to live, salary sacrifice won't help him.

melly1980

Oldernotwiser wrote: »

If the OP needs CB to live, salary sacrifice won't help him.

I think your missing the point.

If he is just over the limit by say £1000 then he could sacrafice the £1000 to keep £2500. Also dont forget, to lose that £2500 he would need to earn £5000 gross more to stay on the same wage. It is a sensible option and hopefully one that is available to do. It is a scandle that they are prepared to take the easy option and take money like this from families with single earners while leaving families with dual earners who earn more untouched. I still dont think they will do it, or not at least in this guise.

kst101

It is also annoying that if one person is a HR tax payer then CB will go whereas you could have two people both earning near to the HR tax band and they would keep CB, whilst earning a lot more altogether.

kst101

I think I heard that it would still be given to HR tax payers (partly so that SAHP would still get HRP) but that they would have to declare it (and so presumably it would be taken away in some way).

DX2

jgcfmt wrote: »

I have heard that if you are just within the 40% bracket then it may be possible to hang on to child benefit payments from 2013 if you increase pension contributions or charitable donations.
Does anyone have any ideas or links as to how to do this?

http://www.thisismoney.co.uk/pensions/ask-an-expert/article.html?in_article_id=515890&in_page_id=138

Oldernotwiser

melly1980 wrote: »

I think your missing the point.

If he is just over the limit by say £1000 then he could sacrafice the £1000 to keep £2500. Also dont forget, to lose that £2500 he would need to earn £5000 gross more to stay on the same wage. It is a sensible option and hopefully one that is available to do. It is a scandle that they are prepared to take the easy option and take money like this from families with single earners while leaving families with dual earners who earn more untouched. I still dont think they will do it, or not at least in this guise.

And I think you've missed the point that I was replying to a poster who was talking about sacrificing 30 grand!

corbyboy

Oldernotwiser wrote: »

And I think you've missed the point that I was replying to a poster who was talking about sacrificing 30 grand!

Are you sure, because you did specifically mention the OP in your post:

Oldernotwiser wrote: »

If the OP needs CB to live, salary sacrifice won't help him.

melly1980

Oldernotwiser wrote: »

And I think you've missed the point that I was replying to a poster who was talking about sacrificing 30 grand!

well your right on one thing, older does not mean wiser

Now going back to your post you said

Oldernotwiser wrote: »

If the OP needs CB to live, salary sacrifice won't help him.

And since you were talking about the OP and not the 30K example that someone else brought into play then my point was very much valid.

Oldernotwiser

corbyboy wrote: »

Are you sure, because you did specifically mention the OP in your post:

I should have quoted the poster I was replying to but didn't because it was immediately above mine. I agree that it would've been clearer if I had.