Stop at home Mum - Tax Allowance

jellyhead

you earn more than 50k? lucky you lol! we're in the 20-50k bracket (less than 25k though) that gets a tenner a week in tax credit. plus there's child benefit for everyone. i still think one income families have it harder though - i don't understand why the government are so keen for us mums to go to work and put our kids in childcare, it's not as if there are enough jobs for everyone out there and childcare isn't one to one so it's not as if we create new jobs. maybe there wouldn't be so much fuss about falling eduction standards if more mums stayed at home to teach nursery rhymes to their babies.

lisyloo

" I earn out of the bracket for tax credits, this really does annoy me too!!!!"

You don't get tax credits because it's judged you don't need them.
You earn at least double the average income.

I am a working woman who has not taken any time off from work.
My taxes subsidise your child rearing massively (NHS, schools etc).

I don't mind this (as your kids will be paying my NHS and pension when I'm old) but you should bear in mind that the education and health services your children will receive are massively subsidised by other tax payers.

I have no axe to grind about subsidising others as I think our welfare state is good, just pointing out that you ought to realise what you are getting from other tax payers.

BTW - my mother in law was ill a few years ago and got about £50K worth of intensive care to save her life.
I am all for the welfare state and don't mind doing my bit.

Plasticman

I would love to be able to use my wife's tax allowance! My wife is staying at home with the kids so we only have one income. People think we are well off because I earn a good wage, but forget the fact that they are better off then us because they have two incomes!

Spendless

lisyloo wrote:

" I earn out of the bracket for tax credits, this really does annoy me too!!!!"

You don't get tax credits because it's judged you don't need them.
You earn at least double the average income.

I am a working woman who has not taken any time off from work.
My taxes subsidise your child rearing massively (NHS, schools etc).

I don't mind this (as your kids will be paying my NHS and pension when I'm old) but you should bear in mind that the education and health services your children will receive are massively subsidised by other tax payers.

I have no axe to grind about subsidising others as I think our welfare state is good, just pointing out that you ought to realise what you are getting from other tax payers.

This also applies to children whose families do receive tax credits.

If the poster has a salary of £50,000+ I should imagine he also pays a lot of tax and possibly his take home pay will be equivalent to someone on a lot less money who is eligible for tax credits.

He might not even receive £50,000 as a salary if he has benefits in kind (such as company car, health insurance etc) this is added on as income for the benefit of tax credits.

jellyhead

true, we have this 'benefits in kind' malarkey too, the tax credits people take it off you twice don't they. you're already having shedloads of tax deducted from your gross income for the privilege of having a company car but tax credits add the same amount on to your income and say you earn more than you do, taking you over the threshold to get help with childcare etc.

we're not starving poor or anything, obviously we earn more than minimum wage and i'm not saying we deserve anything extra from the state but in our case we're around 2 thousand worse off than a couple with the same income on paper as ours but without a company car and with both of them working - both couples on the 'average' 24k income but one couple significantly better off. what does this government have against stay-at-home parents? it's not as if there are enough jobs for everyone, surely society as a whole would be better off if a few more women stayed at home and left jobs open for the unemployed men lol!

robindunne1

I've decided to write a letter to my MP. What do you think??

Dear Sir / Madam,

I read with interest the latest government plans to extend the number of weeks maternity leave for working mothers. While I applaud the governments attempt to benefit those with children, there are a number of issues which never seem to be addressed.

There's a discrepancy in the way tax credits are worked out in one income families – as it is worked out on pre tax earnings. A two income couple will bring home over a thousand more in take-home cash than a one income family yet they are assessed on the same joint income. For example

1 Income family:

Gross Salary: £20,000
Tax: £3,113
National Insurance: £1,493
Net: £15,394

2 Income family:

Parent 1 Parent 2

Gross Salary: £10,000 £10,000
Tax: £913 £913
National Insurance: £553 £553
Net: £8,532 £8,532 Total take home combined pay: £17.064

That’s a difference of £1,670! That’s £32 per week! and yet they will receive the same tax credits. I’m sure you’ll agree that £32 per week is a big difference to a struggling family with young children. Currently, tax credits applicants have to report an increase of £2,000 to reassess the tax credit award. The difference in the take home pay, grossed up for tax and NI purposes is £2,420 in the example above – and yet the government ignores it!

This has annoyed me for years. My wife stays at home to look after the family but I don't see any of her tax allowance. It seems the government are doing everything to help families with two parents that work - extended maternity leave, child care tax credits etc...., but those with one income don't get a look in.

Is the government forcing the mother out to work, or will it take steps to allow single income families the tax breaks that the whole family deserves.

Also, Families with a stay at home mother do not receive the single persons council tax rebate either. Surely this is a tax based on the households ability to pay. A single persons allowance is given because they have one income, yet when the mother doesn’t go out to work and the family still has one income, the full council tax is required – which is completely unjust and unfair.

If a family on a single income lived in the average Band D property and received the single persons allowance together with initial allowances for Income Tax and National Insurance for both parents, they would be better off by over £37 per week!

I’m sure there are millions of families in this country in a similar situation and are being taxed unfairly. Why can’t the government please take into account the income of the family rather than just the number of people who work in that family – surely this is the fairest way. I know that if I was self employed my accountant would use both allowances, but as I work full time (for the government I might add) and pay my tax thought the PAYE system I pay more tax.

It seems the government penalises those families who are interested in looking after their children more than just financially. Surely the best person to look after a child is its mother (or father) yet the government promotes the idea that both parents should leave the home to work.

I hope the government will look into this and stop penalising those families that really care for their children.



Yours Sincerely,

filigree_2

The one-income family gets less net income than the two-income family, but the two-income family has to pay for childcare. Even with the WTC subsidy you still have to find 30% of the costs, and fulltime daycare for one child in this area costs £150 a week. What they gain on the swings they lose on the roundabouts.

I recall the Tories promising in 1997 that they would transfer tax allowances to the wage earning spouse, if the non-earner was caring for children, elderly or disabled relatives. It was a bit of a last ditch vote buyer, I wonder if they'll resurrect it if they actually come to power.

jellyhead

i hope they do ... not that i've ever voted tory lol!

okay a 2 income family has childcare costs, but those who use grandparents or other relatives as carers don't necessarily have these costs, and if they pay the carer an allowance for meals etc. it's balanced out by what they'd have spent on meals, electricity, heating etc. if they'd been in the home for that time anyway. those who pay for childcare get up to 70% of it off the government and also get the difference of the two tax allowances, if they only pay 30% of their £150 a week childcare bill isn't it all balanced out? meaning the taxpayer is paying a £150 a week childcare bill for a mother to go out to work while there's a family in the same street being totally supported by the welfare state because there aren't enough jobs to go around, it doesn't make sense to me. get women back in the kitchen where they belong :-p

HairyHatMan

jellyhead wrote:

....we're around 2 thousand worse off than a couple with the same income on paper as ours but without a company car and with both of them working...

ummm, what do you think a comapny car's worth? It's certainly more than 2k a year.

jellyhead

to some maybe but not to us! i agree it would cost us a lot of we wanted to buy a brand new car but that's not something we'd ever think of. we ran a car before we got the company car and taking into account what we paid for the car, the tax, MOT, insurance, a monthly amount set aside for repairs etc. it cost us LESS to run our own car than we are being charged in tax on this company car. okay it's nice to have the extras that come with a reasonable car and this car is certainly more attractive than ours was but it's not something we'd have chosen - we couldn't afford it. the company car was instead of a payrise last year but it ended up making us worse off. we've not long finished uni, we're not the type of people who care about the age or design of a car (or even the colour, hubby's colour blind so he didn't realise his old car was revolting lol!), if it moves it's fine, so we were perfectly happy in our old car. getting the company car made us around £5 per month worse off, not a great deal per year but having that income taken into account twice for tax credits purposes also took us over the threshold for getting child care help etc.

and about 2 income couples paying for childcare, i know plenty of people who only use childcare in school holidays because they normally work school hours, or who use relatives and don't have childcare costs at all.

this discrepancy in the way tax credits are worked out could mean a great deal of difference, especially to families on lower incomes.