Losing Child benefit

ness_w

I have 6 children and earn exactly £60k a year so stand to lose all my child benefit, some £4,539.60 PA in one hit.

My employer are very flexible anyone any thoughts on how I can adjust my earnings to avoid this loss.?

JimmyTheWig

Pay the equivalent of £10k gross into a pension.
With £50k taxable income you'll also get some tax credits with 6 children (assuming your partner doesn't earn anything) so definitely worth doing.

zagfles

JimmyTheWig wrote: »

Pay the equivalent of £10k gross into a pension.
With £50k taxable income you'll also get some tax credits with 6 children (assuming your partner doesn't earn anything) so definitely worth doing.

Yes, as we discussed recently here you'll have a marginal deduction rate of over 100% (128%) between £50k and £58,480 so definitely worth doing - you'll be better off on £50k than on £60k !!

The govt really need to adjust this - larger families will have MDRs over 100%, perhaps they should raise the threshold for larger families or give them a wider withdrawal band.

It's like the benefits cap - a popular & simple policy designed so that even Sun readers can understand, but which creates anomilies like this.

colin3_2

If your company is big enough purchasing your company shares via its scheme - there is a £1500 limit which is deducted from taxable pay in any one year

Murgatroyd21

zagfles wrote: »

Yes, as we discussed recently here you'll have a marginal deduction rate of over 100% (128%) between £50k and £58,480 so definitely worth doing - you'll be better off on £50k than on £60k !!

The govt really need to adjust this - larger families will have MDRs over 100%, perhaps they should raise the threshold for larger families or give them a wider withdrawal band.

It's like the benefits cap - a popular & simple policy designed so that even Sun readers can understand, but which creates anomilies like this.

Hahaha you're sooooo funny. Go on, explain to people how you come by the 128% rate when losing £4539.60 from a household gross income income of £64539.60!!! (Have you got your imaginary friends on standby again?)

zagfles

Murgatroyd21 wrote: »

Hahaha you're sooooo funny. Go on, explain to people how you come by the 128% rate when losing £4539.60 from a household gross income income of £64539.60!!! (Have you got your imaginary friends on standby again?)

For other people's benefit:

With 6 kids, tax credits would be payable up to an income of £58480. Tax credits are tapered at 41%, child benefit will be tapered for the OP at 45.4% on income above £50k, add tax at 40% and NI at 2% and that give a MDR of 128.4%.

On £50k the OP would be entitled to child benefit in full, ie £4540pa plus tax credits of £3477 (or £2452 in the first year due to the £2.5k disregard). Add to take home pay of £35778 makes a total of £43795.

On £60k there would no tax credits or child benefit (after Jan), so the OP would just have take home pay of £41578.

So another example of being better off on lower income.

In the OPs situation it's well worth putting as much into a pension as possible regardless of the new child benefit rules, since the relief is massive even without the ch ben change - 81-83% just accounting for tax credits and income tax/NI. So with a "very flexible" employer I'd suggest salary sacrifice into a pension of as much as possible, preferably down to the 40% tax threshold (about £42500).

LuckyLouise

ness_w wrote: »

I have 6 children and earn exactly £60k a year so stand to lose all my child benefit, some £4,539.60 PA in one hit.

My employer are very flexible anyone any thoughts on how I can adjust my earnings to avoid this loss.?

£55,000 is still way more than a lot of households are managing on!!!!

Before you ask how many children I've got . . . I've got one, if you have six don't expect the rest of the country to pay for them.

I can't believe you are also trying to fiddle the system so you will still be eligable.

Sorry if this sounds harsh, it just makes my mad!!!!!!!:mad:

zagfles

LuckyLouise wrote: »

£55,000 is still way more than a lot of households are managing on!!!!

Before you ask how many children I've got . . . I've got one, if you have six don't expect the rest of the country to pay for them.

I can't believe you are also trying to fiddle the system so you will still be eligable.

Sorry if this sounds harsh, it just makes my mad!!!!!!!:mad:

You're not the only one;)

You'd be even madder in other EU countries like France where the OP would get 5 tax allowances to set against his income, which is worth far more than the ch ben and tax credits he'd get here.

See also this thread:
https://forums.moneysavingexpert.com/discussion/3867541

sarahg1969

LuckyLouise wrote: »

Before you ask how many children I've got . . . I've got one, if you have six don't expect the rest of the country to pay for them.

Are you suggesting that someone who earns a good wage and did not claim anything other than child benefit for their 6 children, should have turned down that benefit at a time when they were entitled to it?

I take it you don't claim CB for your one child?

At what salary level/number of children do you think people should have stopped claiming (even when they were entitled)?

Murgatroyd21

OP states "I have 6 children and earn exactly £60k a year" not next year, last year but a year, so wouldn't have been getting tax credits this year, so can't "lose them" next year.

Child benefit is tapered at 10% of the Child Benefit for each £1000 earned over £50,000. Being already on £60,000, OP stops being entitled to any Child Benefit. In actual terms they could be losing approximately 7% of the current gross income due to the changes. And they won't be losing that in full until January 2013 so not a full 7% until 2013/14 tax year.

Naughty_Noonoo

LuckyLouise wrote: »

£55,000 is still way more than a lot of households are managing on!!!!

Before you ask how many children I've got . . . I've got one, if you have six don't expect the rest of the country to pay for them.

I can't believe you are also trying to fiddle the system so you will still be eligable.

Sorry if this sounds harsh, it just makes my mad!!!!!!!:mad:

So you have a problem with tax payers trying to keep hold of their child benefit. What about the ones who have never worked? Do you have a problem with them too?

If I was you Lucky Louise then put 10k into a personal pension or additional contributions to a company pension. You will be 6k out of pocket in terms of your salary but keep the Child Benefit. You will also be reunited with your 10k in one form or another when you retire. Or you can accept the fact that your earnings between 50k and 60k are subject to TAX / NI / CHILD BENEFIT deductions of over 85%!