MSE News: Budget 2012: Child benefit cut partially reversed

sly_dog_jonah

JimmyTheWig wrote: »

My confusion with this term is that, to me, Net Income means income after income tax and NI.
But I don't think that this is what it means here, is it?

Is this, pretty much for most people, the same as Taxable Income?

No it isn't, read the HMRC link in my last post for more info, as they've explained 'adjusted net income' previously - it is just lacking an example with child benefit.

cbscotland

sarahg1969 wrote: »

Surely this daft idea is going to cost more to administer than it will save? It would have been more sensible to scrap CB altogether, and simply up the level of tax credits to those on low incomes. That would cost nothing whatsoever to administer, and the CB department could be closed, saving a fortune in staffing costs and overheads. It's a much simpler idea.

Probably wont be too much to administer as the poor sods who have to administer it are.........us through our tax codes. wE are responsible for telling HMRC what we have earned, whether we have paid into a pension, whether we have a company car, fuel card etc. We are doing their work so that we can pay them tax at marginal rates of over 50%.

Does anyone else pay tax at 50%?????? oh yes the super rich do.......but only until April 2013.

sly_dog_jonah

shedboy94 wrote: »

I've never seen so many people earning £50 / £60k moaning about losing BENEFITS in my life......do you honestly think it is a fair system that BENEFITS are paid to everyone regardless of income? If you think £60k is too low then what should the cut off be......or do you not think there should be one?
I'll do a deal.....I'll swap my lower salary, along with a 4 year min pay freeze, but receiving CB for your 60k salary..........no takers??

It would be fairer to do it based on household income, not the highest (or sole) earner's income. But even then a household with a single 60k earner will have far less net income than a household with dual earners with a combined £60k income, thanks to the double personal allowance.

I won't be looking for a job swap thanks, I'm quite happy working for a company where rewards are based on individual (and team) contributions.

I presume you think that those earning £60k shouldn't get pension tax relief, statutory maternity pay or statutory redundancy (to name a few 'benefits' or reliefs)?

Do you think it's fair that for every £100 pound a parent in a 2 child family earns over £50k, they only get £40.50 after tax, NI and loss of CB?

zagfles

GobbledyGook wrote: »

I think this child benefit thing will last one year then in the following budget they'll say "it's too complicated so we're throwing child benefit in with Universal Credit" so that it'll be based on household income and can be cut more.

It's pretty much a carbon copy of what Labour did with the old tax allowances (married couples/additional personal allowance). First they replaced it with the children's tax credit, a tax allowance means tested on the highest income in a couple (just like ch ben now), but this only lasted 2 years before being merged with the WFTC in the current tax credits.

tyllwyd

sarahg1969 wrote: »

Surely this daft idea is going to cost more to administer than it will save? It would have been more sensible to scrap CB altogether, and simply up the level of tax credits to those on low incomes. That would cost nothing whatsoever to administer, and the CB department could be closed, saving a fortune in staffing costs and overheads. It's a much simpler idea.

I agree that this seems like a complete mess of an idea that might easily cost more than it saves. I thought the whole idea of the higher level tax cut-off was to make the admin simple? That seems to have gone out of the window.

I would agree about paying it through the tax credits system except that tax credits can be a total nightmare to claim, and it is so easy to get overpayments which leave you with nothing coming in or huge sums demanded back. At least with child benefit as it is at the moment, it is very simple to claim and when you get the money you know that it is yours to keep - so it will reach the most vulnerable families where mothers might struggle to make a tax credit claim because of lack of education, an abusive or chaotic home life, mental health problems or some other reason. At least this way, the benefit might go to some high earners who perhaps could manage without it but on the flip side it also reaches more of the children who really do need it.

MumDrum_2

This seems to add a ridiculous amount of admin for the IR who are incapabable of managing their current workload.

It is unfair to penalise couples where one earns over the threshold leaving families earning over 100,000 with benefit.

It seems blindingly obvious to me that instead of having two systems to administer they should have stopped all child benefit and increased child tax credit this would have left one benefit to administer and a fair removal of CHB taking into account joint income and childcare costs.

In reality it seems the reduction in higher rate tax will cancel out the effect of this?

Accountants will be delighted, self assessment will never cope with all this!

So perhaps it's a job creation scheme?

zagfles

FBaby wrote: »

This brings a question of principles when it comes to step families. why is it acceptable for a a partner of a parent with care to see his taxes affected because of his partners children not his own yet the rules have been changed so that the salary of the partner of the non resident parent is protected for the calculation of maintenance. I think this is serious double standard. a nrp could not work and not have to pay a penny even though his partner could be earning over a 100k but a pwcp will be penalised if he earns over £50k

Agreed, but this double standard already applies to tax credits. As it's mainly men who are adversely affected nobody seems to make a fuss

shedboy94

sly_dog_jonah wrote: »

It would be fairer to do it based on household income, not the highest (or sole) earner's income. But even then a household with a single 60k earner will have far less net income than a household with dual earners with a combined £60k income, thanks to the double personal allowance.

I won't be looking for a job swap thanks, I'm quite happy working for a company where rewards are based on individual (and team) contributions.

I presume you think that those earning £60k shouldn't get pension tax relief, statutory maternity pay or statutory redundancy (to name a few 'benefits' or reliefs)?

Do you think it's fair that for every £100 pound a parent in a 2 child family earns over £50k, they only get £40.50 after tax, NI and loss of CB?

I would like to be in the position to moan about losing CB or to discuss how much I would earn after £50kpa, however I am not. I don't grudge anyone who works hard and earns good money but at the end of the day most people in the country are suffering one way or another ( I for example are deemed to be getting paid too much so the government has frozen my pay for 4 years, and increased my pension contributions, effectively handing me a real time pay cut ) , but I think it a little unfair that those earning a good salary are complaining about losing a benefit that probably should have been means tested in the 1st place. Again I'll ask the question, if £60k is too low a figure for these benefits to stop then what figure should it be?

zagfles

cbscotland wrote: »

Probably wont be too much to administer as the poor sods who have to administer it are.........us through our tax codes. wE are responsible for telling HMRC what we have earned, whether we have paid into a pension, whether we have a company car, fuel card etc. We are doing their work so that we can pay them tax at marginal rates of over 50%.

Does anyone else pay tax at 50%?????? oh yes the super rich do.......but only until April 2013.

Anyone claiming tax credits has a marginal rate of at least 73%

zagfles

blush2783 wrote: »

Hi all, can anyone confirm for me about the age cut off for child benefit? A while ago they were batting the idea around of losing it once your child was 12. Has this been scrapped?

It's not changed, still 16 or 18 (if in full time education).

They've changed the way NI credits work, these used to be age 6 for second state pension and 16/18 for basic pension, now they're both 12.