MSE News: Budget 2012: what the child benefit overhaul means for you

cw18

JimmyTheWig wrote: »

But surely it is possible to receive more in Tax Credits than you pay in tax?

Yes you can. My daughter used to - especially by the time you counted in the help with childcare costs.

But (as far as I'm concerned) it's better that people receive more than they pay in tax, when the other option is that they don't work at all and just get benefits (which, for the records, also includes Tax Credits - the part of Income Support that used to be paid to support children is now paid via the Tax Credits system, and you only get ESA for adults in the household).

And I'm not knocking anyone who - especially for medical reasons - can't work..... there's a big difference between can't and won't.

AirlieBird

JimmyTheWig wrote: »

But surely it is possible to receive more in Tax Credits than you pay in tax?

shedboy94 wrote: »

They are benefits - how can it have anything to do with Tax if you don't work and receive CTC - you are not paying any Tax?

Yes you can, and when that happens they are officially classified as negative tax. It's precisely why the Tax Credit system is operately separately from Income Tax, as you would only be able to be supported up to the level of income tax you were liable for.

Anyway, we've gone a bit off topic.

slipons

I believe my wife has always claimed child benefit directly into her personal bank account, however i cannot verify this unless she shows me her statement or the HMRC confirm to me that they are paying her the allowance. I will be interested to see on the tax return form how i should declare my wife receives the benefit if i have not seen the evidence! Will she be required by law to declare her personal financial affairs to me?

This is an unworkable system!

slipons

I think the issues created with this policy have been accurately captured in a white paper created for the library of the house of commons parliament.uk/briefing-papers/SN06299


I find it interesting that the government seem to have lost sight of all the original objectives and values of the child benefit system.

nellynerd

The BBC report this morning says that the HMRC are setting the level at an "adjusted net income" above £50,000. I'm confused as the only guidance on the HMRC website seems to indicate that adjusted net income refers to your taxable income, i.e. what's left after you've taken off your allowance. So does this mean that the new system kicks in at £58,105?

http://www.bbc.co.uk/news/business-17838735

The HMRC guidance doc is here: http://www.hmrc.gov.uk/incometax/adjusted-net-income.pdf

And it seems that accountants are also confused about this - see http://www.accountantscircle.co.uk/Forums/tabid/59/forumid/-1/threadid/1108/scope/posts/Default.aspx

Any thoughts anyone?

kids9698

This is really confusing.
My husband (the father of my children) and I are divorced. He may earn over £50k, but I don't know. I claim child benefit. I am living with somebody else, but he is a lodger, nothing more. Neither of us earn over £50k.
As HMIT look at who is earning in MY household, does this mean they don't need to look at how much anybody is earning in my ex-husbands household, even though he is the father of my children?
Why should they need to know how much my lodger earns?
Also, does profits from shares count as income?
I am totally lost and I can't plan ahead on my finances because so many questions seem to be unanswered by the government and HMIT.

JimmyTheWig

kids9698 wrote: »

I am living with somebody else, but he is a lodger, nothing more.
...
Why should they need to know how much my lodger earns?

I would say, by the sounds of it, that yuo and your lodger are two households who happen to live in the same property.
The lodger is irrelevant (other than the fact that they might give you money for lodging with you and so that increases your income).

Torkijo

sly_dog_jonah wrote: »

Useful Q&A worth adding:

Do benefits in kind (eg private healthcare, company cars) count towards income?
Do salary sacrifice pension contributions affect the income?
Do salary sacrifice childcare vouchers affect the income?
How are non-salary sacrifice employee pension contributions treated?

These all relate to the 'adjusted net income' which HMRC referred to yesterday in the budget documents. Some authoritative answers would be good, but some forumites have already had a stab at answering them in this thread:

https://forums.moneysavingexpert.com/discussion/3863117

Has there been a definite answer on this? wondering if Childvcare Vouchers and normal pension contribution would count as they take be below the £50k mark?

JimmyTheWig

I know that you can take off your pension payments before declaring your income to tax credits. As for anything else I don't know for sure but would guess that it is your taxable income that they are interested in.

elsieboo

When will we have to declare or will more be said about this bearing in mind it is now september? It is all very quiet for such big changes.

Jilly