MSE News: Budget 2012: Child benefit cut partially reversed

royalsteve

i have 4 options:-

quit my job and go on the dole
go self employed
leave the country
get a divorce

what a shambles this govenment and the last govenment are

royalsteve

chelle333 wrote: »

This rule is madness ! why should a single earner household lose out and a couple with two personal allowances keep their child benefit Completely ridiculous and really unfair, what were they thinking ??????? they not going 2 keep there voters this way.

Agreed. Ive already complained to my MP. For me, this will end the current govenment as theyve have hacked off alot of people and now just alienated the remaining supporters.

daveandstella

I'm going to put a sign in my window at election time;

"All canvassing politicians please beware:- I am a public sector worker, paying 40% tax and I have 5 kids. My child benefit has been removed, I'm on a 4 year pay freeze, with increased pension contributions.

Before you ring my doorbell, ask yourself if you can outrun my dog to the gate - You have been warned":rotfl:

jsg123

There is an epetiton you can sign, do a search for child benefit epetition and you will find it. Might not do any good but worth signing. I'm a stay at home mum and my husband earns £60k a year so we're losing out. Ive chosen to stay at home with two children - I was a primary school teacher and feel we're losing out again, my tax free salary isn't transferable so we earn a lot less on people earring £50k each!

TheSqueezedMiddle_2

As expected, there are differing opinions as to whether the cuts to Child Benefit for £50k-plus earners are fair - or manageable.

I earn a basic £40,000 per year - and I have been without any pay review for 5 years. In addition I earn commission which is totally unpredictable - in 2010 it was £12k, 2011 £7k, 2012 £17k.

My wife earns circa £11,000 per year - working school hours - and yes, has considered increasing her hours & paying for childcare, the extra income vs. cost of care doesn't stack up.

We are now border-line to lose our CB if I have a reasonably good year - which is a bit of a blow, having just been told that I'm going to receive a £4,000 basic rise in January.

So...whilst being pretty level headed, I think, and appreciating non-parents views as to whether I should even get Child Benefit for children that I chose to have...I still find myself a little irked by these changes.

My first issue: A guy who works with me, will earn a little less than me this tax year - around £43k - and is open enough to state that his Mrs earns 'about the same' as him - will get to keep his entire CB. We will lose some/ all of ours if I dare work too hard.

Second issue: I feel like I'm getting shot from all sides, what with higher-rate tax, and now this.

Now I know that some people would swap my salary for theirs, and £50k is enough to live on without the need for benefits, blah blah...but - our combined salary doesn't by any stretch, give us a frivoulous quality of life. I have a big mortgage, ever increasing bills, debts, growing kids - the same as lots of folk - we didn't go on holiday in 2012 at all, and there are jobs galore on the house that I'm behind with. The only non-bill I have going out is Sky.

There is this assumption that if you earn more, you're automatically better off. I was better-off, it seems, 15 years ago, earning half what I do now!!

So, all told, I'm stuck when trying best to manage my salary in a way which will minimise the impact upon us. It's crazy to think that if I earned £10k less, and my wife £35k more, we'd still qualify with no problems. Bonkers.

I'm really hoping that this system fails, proves difficult to manage, and that they decide upon a fairer system. If that means combined household income, then fair enough, and if I'm over the threshold for that, then so-be-it - so long as everyone else at that salary level gets treated equally.

One question that I had - if my wife keeps claiming CB, at what point does the Tax deduction get activated through my PAYE? Is it at the start of the following tax year? And will the tax deduction exactly reflect the amount of CB I claim (ie, I won't pay more tax, pro-rata, than the CB we receive??)

thanks

chemical.galaxy

We have not received a letter yet although probably going to lose it all.
Everyone got theirs?

sly_dog_jonah

Still no letter here either. Have been in Self-Assessment for a couple of years now and wife has claimed CB for past 2 years+, so they should be aware of our situation.

TheSqueezedMiddle wrote: »

One question that I had - if my wife keeps claiming CB, at what point does the Tax deduction get activated through my PAYE? Is it at the start of the following tax year? And will the tax deduction exactly reflect the amount of CB I claim (ie, I won't pay more tax, pro-rata, than the CB we receive??)

You may end up with an adjusted tax code AFTER you submit your Self-assessment for this tax-year (when the charge takes effect). The change in tax code would reflect the expected higher rate child benefit charge, and would be based on previous year income (which may of course change each year) and how much your wife currently claims.

The tax deduction should be less than the CB you or your partner receives unless your adjusted net income exceeds £60k, in which case the tax would equal the CB received.

TheSqueezedMiddle_2

I received my letter back in November (or, more accurately my wife did).

Thanks for the info s_d_j re: the tax coding and tax year confirmations....I suppose this way I will end up with a 'bill' at the end of 2013-14, unless my wife opts out of CB (which may be risky, as I don't know what I'm going to earn this and next year).

thanks

princessdon

Nope no letter yet here

JWSM

So I understand that entitlement to child benefit is based on "adjusted net income" (ANI).

So to use an example, if my current ANI is £51,000. I will 'lose' 10% of child benefit unless I reduce my ANI to £50,000 or less. So I decide to pay £1,000 into a personal pension to reduce my ANI to £50,000 and therefore keep all of my child benefit.

Has anyone else paid (or is looking to pay) pension contributions in the 2012/13 tax year to avoid 'losing' child benefit? If so grateful for your help with the following two questions:

1) being a higher rate tax payer, do I only need to pay £800 to the personal pension plan (PPP) - the PPP provider will receive £200 from the government in respect of tax relief and I can claim an additional £200 from HMRC. Does it make any difference if the £200 I reclaim is actually paid in a different tax year to the year I am looking to reduce my ANI to £50,000 ie the £200 is reclaimed in the 2013/14 tax year from HMRC but is payable based on pension contributions paid in the 2012/13 tax year?

2) I understand that the potential reduction to child benefit is for child benefit paid from 6 January 2013. Therefore for the 2012/13 tax year I can only save two months of part of the child benefit by reducing the ANI to £50,000. So is the child benefit for 2012/13 based on the ANI for the 2012/13 tax year? I would have thought so in which case the advantage of paying extra pension contributions in the 2012/13 tax year is only 1/6th the value of paying extra pension contributions in the 2013/14 tax year (because for 2013/14 the contributions would 'save' the child benefit for the whole year rather than just the two months).

Thanks for your help.