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

jonesy2809

I'm a single mum with three kids, recently separated. I earn over £60k (just) while my ex doesn't work or pay any maintenance/contributions to mortgage, etc. I currently claim CB, but could my ex claim and then pay over to me to avoid losing it, even if the kids live full-time with me?

kevin137

jonesy2809 wrote: »

I'm a single mum with three kids, recently separated. I earn over £60k (just) while my ex doesn't work or pay any maintenance/contributions to mortgage, etc. I currently claim CB, but could my ex claim and then pay over to me to avoid losing it, even if the kids live full-time with me?

Then he could claim CSA as well as that is the basis (although not legally) for assessing a claim for CM

And it would also be fraud...

Ollienu

Does anyone know if you take off childcare vouchers and pension contributions? Then this is your gross? Also what about car benefit?

sly_dog_jonah

Ollienu wrote: »

Does anyone know if you take off childcare vouchers and pension contributions? Then this is your gross? Also what about car benefit?

Assuming your pension isn't salary sacrifice:
Net Adjusted Income = [Basic Gross Salary] + [Gross Bonus] + [Taxable benefits] + [Other Gross income] - [Childcare vouchers] - [Gross (employee) Pension contributions]

...where [Taxable Benefits] can include Private Medical, Car benefits, employee awards, etc. You can find these on your P60s or payslips depending on how your payroll works.

If your pension contributions are via salary sacrifice, then put your [post-sacrifice salary (Gross)] instead of [Basic Salary] and use £0 for [Gross (employee) Pension contributions] above.

There's a few exceptions to the above, eg some trade union contributions but mostly the above formula will sort you out. There is a lone PDF on HMRC about 'net adjusted income' if you Google it you may hunt it down.

For every £100 your Net Adjusted Income exceeds the £50k threshold, you lose 1% of child benefit. See earlier posts for some marginal tax calculations depending on the number of children you have.

sly_dog_jonah

From the horses mouth:

Adjusted net income is calculated in a series of steps. The starting point is “net income” which is the total of the individual’s income subject to income tax less specified deductions, the most important of which are trading losses and payments made gross to pension schemes. This net income is then reduced by the grossed-up amount of the individual’s gift contributions and the grossed-up amount of the individual’s pension contributions which have received tax relief at source. The final step is to add back any relief for payments to trade unions or police organisations deducted in arriving at the individual’s net income. The result is the individual’s adjusted net income.

Source: http://www.hmrc.gov.uk/budget2012/tiin-0620.pdf

kevin137

Talk about make it complicated...

So they will still pay CB but you pay more tax, and when you child becomes too old to be eligible, leaves school etc, then you must notify the Tax Man to get your code changed...???

How many people are going to be very very confused, not realise they have to do this, create more work for the tax man which will inevitably cost more than the money saved etc...

Haha

A lovely way to run a country, more crap making a confusing system even more confusing...

rc6200

I noticed that the HMRC advice note states that you can opt to stop receiving the child benefit. Does anyone know if there will still be the safeguard for the SAH parent's Ni contributions?

shoe*diva79

rc6200 wrote: »

I noticed that the HMRC advice note states that you can opt to stop receiving the child benefit. Does anyone know if there will still be the safeguard for the SAH parent's Ni contributions?

I wondered this as well and despite a lot of searching online I haven't found anything conclusive.

ChasingButterflies

rc6200 wrote: »

I noticed that the HMRC advice note states that you can opt to stop receiving the child benefit. Does anyone know if there will still be the safeguard for the SAH parent's Ni contributions?

Hi,

Have a look at the 2nd paragraph under the "Example" heading.

http://www.hmrc.gov.uk/manuals/pommanual/PAYE14015.htm

It seems that HRP should still be credited to the stay at home parent.

rc6200

ChasingButterflies wrote: »

Hi,

Have a look at the 2nd paragraph under the "Example" heading.

It seems that HRP should still be credited to the stay at home parent.

Thank you very much.