MSE News: Chancellor: child benefit cut will go ahead

Mrs_Arcanum

zagfles wrote: »

Employer schemes usually deduct pension conts from gross pay so your taxable/P60 pay is lowered. Personal pensions you can declare on the tax returm and they'll extend your basic rate band, taking you completely out of higher rate tax if you contribute enough, as I'm sure a lot of people on the borderline will if this goes ahead...

Thing is, Child Tax credit asks for your Gross wage (as per your P60) which as has been pointed out is not what the taxable pay is. Trying to see what DH's taxable pay is from his P60 is as clear as mud.

draconian_2

A year ago I would have agreed with this move and strangely everything has flipped in my life.
I"ve worked smart as well as hard and studied to better myself and put myself in front of opportunity. This has meant a gret deal of sacrifice in many facets of my life but each to their own.
As a result of the above I have made a good living - I was paying maintenance for my son, after a very expensive divorce, and then lived with someone who earned a very good income adjacent to mine.

Now I am married to an immigrant that I had to pay 1,000's in fees to bring her here (met her abroad whilst working) and now we are married and a child on the way.

My salary is seriouly stretched now and my wife cant work as yet, and there was a glimmer that a bit of help from the tax Ive paid into the system is going to come back, after all if you invest you should reap.

I'm pretty dissapointed at the stance of a few people - everyone on this board can change if they change - its really simple - but telling us all that we are rich because we pay 40% tax is really senseless.

Someone spelled it out nicely showing their taxable contribution at 1180 odd a month - for the last 26 years I personally have contributed to the coffers too and although it peed me off seeing labour pee it up the wall was pretty hard to take getting some CB for my child on the way made me feel the contribution is worth it. It definately isnt...
So those of you who say the hardest workers should be taxed more - guess what we are already - I just hope some of you have a brain, some motivation and the ability to use it to see beyond your current short sightedness... then when your paying 40% or even 50% you'll be ranting on here like I am!

Mark Twain once said the height of insanity is doing the same thing over and over expecting a different result...been there, done it and changed the record..

eeeeeee

my familly is one of those in the middle ; i earnt 43755 last year : i hard and for work long hours too provide for my family like wise may others in this group ; due too the extra few quid i earn the chancellor thinks i should be an extra £2500 a year worse off just due too the fact that my wife stays at home ; yet a couple who earns double can keep their money :
the chancellor needs too GET A GRIP of this ... and quickly
ive already worked it out that i could leave my wife move out of our house in with my mate and financially we would all be better off ( less nagging less bills more money ) \Our familly is not well off in this tax bracket at all :mad:

zagfles

Mrs_Arcanum wrote: »

Thing is, Child Tax credit asks for your Gross wage (as per your P60) which as has been pointed out is not what the taxable pay is. Trying to see what DH's taxable pay is from his P60 is as clear as mud.

P60 income will usually be net of pension contributions to a work scheme. If not, or if a personal pension, you can deduct gross contributions from the income you declare to tax credits. Google TC825. Either way pension contribution are deducted from the income you declare.

JimmyTheWig

Had another thought on this yesterday.

Got my tax code notification through the post. Apparently I've underpaid by a few hundred pounds in the last few years. (Not quite sure how, but their figures seem correct.) They've adjusted my tax code so I pay back what's owed. Fine.
But this will make me more likely to be paying higher rate tax. Does this mean someone could lose their child benefit because they've underpaid tax in previous years?
If that's the case then that's crazy!

Hope2008

I’ve never really understood why a benefit for people with children was started on a universal scale in the first place. People earning hundreds of thousands if not millions a year are as much entitled to the money as someone earning £5k a year – it just doesn’t make sense to me. But it does exist and for many they have come to rely on it and for others it’s money they are entitled to but do not need.
Whatever changes are made, they need to be FAIR and the current suggestion to remove the benefit from households where 1 person is in the higher tax bracket is not FAIR. It penalises 1 parent families, families with a stay at home parent, etc. It needs to be removed based on household income not individual income.
No matter what income level is set as the cut off point for CB there will be people arguing for and against.
On a side point I’d be interested to find out what will be happening with the state pension protection that the parent receiving CB has (formerly HRP). As I understand it currently parents getting CB for children up to age of 12 continue to accrue qualifying years towards their state pension even if they are not in work to pay NI.

JimmyTheWig

Hope2008 wrote: »

I’ve never really understood why a benefit for people with children was started on a universal scale in the first place. People earning hundreds of thousands if not millions a year are as much entitled to the money as someone earning £5k a year – it just doesn’t make sense to me.

I think that half the point is that there aren't many people who don't need it, and to means test it would cost more than it saved.
From what I've found on Google, just over 300,000 people earn over £150k for tax purposes. So by excluding those (who I am sure everybody agrees don't _need_ it), for example, the child benefit bill could be cut by 1%. But I bet it would cost more than that to administer the means testing.

Much more sensible, in my view anyway, to tax the rich and let them keep the benefit.

RedSky

draconian wrote: »

My salary is seriouly stretched now and my wife cant work as yet, and there was a glimmer that a bit of help from the tax Ive paid into the system is going to come back, after all if you invest you should reap.

I don't see how income tax can be compared with investments. Income tax and National Insurance pay for the exact same gov bills and the top 10% income earners pay more than half of all the income tax received. Those that contribute the most tax are not entitled more of its benefits.

Mrs_Arcanum

Another way of looking at this is, if you have two children an one person earns just enough to hit the higher tax bracket, losing CB is the equivalent of a 4% pay cut! If you have more than two children it is even worse. Chances are this will be on top of low or no pay rises over the last few years. Where does the incentive lie to work harder to provide better for your family?

Currently due to rising costs, in many areas of the country £44K is barely enough to manage to bring up a family on.

RedSky

Mrs_Arcanum wrote: »

Where does the incentive lie to work harder to provide better for your family?

When were benefits ever introduced as a disincentive or alternative to work, surely the idea was to help people during less fortunate times. When income tax received is less than benefits paid then the threshold must change.