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Higher tax rate and Child Benefit
Comments
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FROM WHAT I UNDERSTAND CHILD BENEFIT ITSELF WILL NOT BE STOPPING.
BECAUSE AN ni CONTRIBUTION IS PAID BECAUSE OF ENTITELEMENT IT WILL STILL BE PAID.
THE WAY IT WILL BE RECOUPED WILL BE THROUGH THE TX CODING.0 -
when does the unemloyed or the disabled pay taxes`?????????????????????? yes vat but dont we all?
Im severely disabled and I have paid over £3k in tax since April, you havn't paid anywhere near that much you fool and that dosn't include VAT or any other universal taxation, being disabled dosn't mean that you dont pay tax nor does being unemployed when everyone with two qualifying years of NIC's gets 28 weeks contributions based JSA.0 -
Hi Jim
I think that you can see that the answer is that no-one on this forum knows (though it hasn't stopped them replying;)).
Anyway, if it helps (which it doesn't really), I believe that the answer is that NO-ONE knows YET. I have contacted the child benefit helpline and HMRC who have both told me that the mechanism has not been decided yet. Although I have somewhere seen a reference to 'claiming child benefit back if you weren't entitled to it', suggesting that you could wait till 2013/2014 before making the arrangements that you are talking about. But that might have been a very general bit of information going back years.
Frustrating though, isn't it - I'm in a very similar position.
BTW £500 to hire a bike for 2 years? - doesn't sound very money-saving to me (I think you'll find that you don't actually purchase the bike, but you probably get an option to at the end of the hire period, at which point I think you incur a tax liability). You can get some pretty good bikes at Halfords for £250.0 -
In response to nanytones point it will not be stopped via tax coding, the HMRC are relying on the fact the claimant is honest and declares that they should not be recieving it. If the recipient is the person earning more than the threshold it is easy, if it is the spouse claiming and the partner earning over the threshold the claimant is responsible for informing the revenue. The claim will then be stopped by the child benefit office
The telegraph ran an article on this subject, it is from 2013 so I am assuming it will be the tax year starting 05/04/2013 where it becomes effective. The article also included how you can reduce your income to reduce your tax rate. Here is the link.
http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8274927/How-to-avoid-higher-rate-tax-and-keep-your-child-benefit.html0 -
when does the unemloyed or the disabled pay taxes`?????????????????????? yes vat but dont we all?
I paid taxes before I was disabled, and I pay them now. I paid them when I had a job, and when I didn't. Since I stopped being a student, I've paid taxes. Now I'm a pensioner, I pay taxes. Income taxes.
I'm not as disabled as sunnyone. Sunnyone, fool is the right word.0 -
Benefits in kind are taxable so you need to keep thinking OP.0
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Im severely disabled and I have paid over £3k in tax since April, you havn't paid anywhere near that much you fool and that dosn't include VAT or any other universal taxation, being disabled dosn't mean that you dont pay tax nor does being unemployed when everyone with two qualifying years of NIC's gets 28 weeks contributions based JSA.
No they don't.0 -
If you are earning as much as you say you do then hopefully you won't be claiming benefits of any kind, as earning that much you shouldnt't need them, or is ist because you pay so much tax you think you are entitled to them like the OP, if so then quite rightly so, and you have no idea how much my family pay in tax. This is directed @ sunnyone, there is no need to call me a fool just because i do not think that only the non working or low earners should benefit from taxes.0
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InDeepDebt wrote: »I know perfectly well why the benefit is being stopped. However, someone on £42,474 with two children who gets a pay rise will need to get a rise of over £2900 to actually claw back the money that they have lost.
If you do the sums for me – assume that I am on £44k a year – that is £1,525 (taxable) above the higher tax threshold – yet I will be £1,752 (tax free) a year worse off. So, if I reduce my taxable pay by £1,526 then it will cost me £915 a year in my hand (£76 a month) – yet I’ll get £132 a month child benefit. These are approximate figures as I’ve only taken account of the 40% tax rate and not any national insurance that is paid (if any) above £42,475.
So, based on the above calculations, I may as well buy some more pension for my retirement or/and get a bike and save on diesel – or/and buy an extra five days holiday a year. Seeing as I sold five days this year that will give me an extra 10 days holiday.
Anyone with more than two children will have an even bigger decision to make should they get promoted into the higher tax threshold. Someone with four kids will be £60.50 a week worse off – or £3146 a year tax free. That means that someone on £42,474 who gets a promotion or the offer of overtime will need to earn £47,700+ just to break even. If they have the opportunity to pay into a pension or ‘lose’ some pay some other way – they would be daft not to.
Jim
PS - I assume that you don’t know the answer to my original questions then.
I am pretty much the example you use at the bottom, stand to lose a great deal so no, I wont listen to sanctimonious p**ks like scootw1 who think that a family of 6 should just take an instant 3 grand pay cut while families with larger combined incomes continue to get it while paying a lower proportion of tax on their wages than me. Some people really do need to get their heads out of their @rses.Salt0 -
In response to nanytones point it will not be stopped via tax coding, the HMRC are relying on the fact the claimant is honest and declares that they should not be recieving it. If the recipient is the person earning more than the threshold it is easy, if it is the spouse claiming and the partner earning over the threshold the claimant is responsible for informing the revenue. The claim will then be stopped by the child benefit office
The telegraph ran an article on this subject, it is from 2013 so I am assuming it will be the tax year starting 05/04/2013 where it becomes effective. The article also included how you can reduce your income to reduce your tax rate. Here is the link.
http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8274927/How-to-avoid-higher-rate-tax-and-keep-your-child-benefit.html
I don't think this article is right. For a start the spending review states the change will happen in Jan 2013, not April, so not aligned with the tax year.
Also I'm sure the govt stated that they wouldn't stop paying child benefit to the claimant, instead they'd take the equivalent amount off the HRT payer. Otherwise you'd get the usual pressure groups whining about income distribution within the family, and this govt seems to want to appease such groups, so I don't think they'll want to stir them up. There's also the HRP NI credits issue, ie getting CHB gets you credits for the state pension.
Anyway I'm waiting for the U-turn in the next budget when they finally realise what a stupid policy this is.:)0
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