Tax Credits

BJV

kingfisherblue wrote: »

What's BJV?

I think that the Op was answering a post I made

BJV

BigAunty wrote: »

I'm not blaming claimants - this is a system issue.

A better way to have dealt with this is through lowering taxation for those on low incomes (which has been partly remedied by an increase in the personal allowance) or increasing the national minimum wage.

According to an official Treasury forecast, benefits will cost £170.9 billion in 2010/11. That is equal to what the Government will spend on the NHS, schools and universities combined.
This year will be the first in a decade that benefits cost more than workers pay in income tax. "
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Completely unsustainable.

I totally agree if the bracket for tax was lowered this would encourage more people to work. I really had no idea that the benefits budget was as large as the NHS. Really frightening but as you say its not a claimant issue instead it a totally different entity.

I am not sure if raising the minimum wage would help or would it not just mean that smaller business's have to reduce the number of hours they can offer?

Mumto3cheekymonkeys

ISAMOG. Maybe you could head to the budgeting forum and see if there is any way in your spending that you could cut back on making life easier for you? Im not sure of your situation (ie how many children, mortgage, where you live) but I have my partner plus our 3 children 5,4, and almost 1 and we only have a yearly income of £26000 including our benefits and find this is more then enough for us. We also have a mortgage.

Morlock

BigAunty wrote: »

According to an official Treasury forecast, benefits will cost £170.9 billion in 2010/11. That is equal to what the Government will spend on the NHS, schools and universities combined.
This year will be the first in a decade that benefits cost more than workers pay in income tax. "


http://www.telegraph.co.uk/news/uknews/5651825/Benefit-payouts-will-exceed-income-tax-revenue.html

Do you know who the biggest beneficiaries of that estimated £170.9 billion are?

malkyh

isamog wrote: »

, We ourselves do not qualify for Tax Credits, as my Hubby earns over 26,000, you may think we don't need it, my Hubby works 70hrs a week..and what we did get helped....now we have had Tax credits asking for Moneys..ie overpayment..We could never guess how much he earned as Hubby got Bonus and that is different every week..so now we have to pay back, and because we don't received Tax Credits no more the Government changed the income bands.we have.to find this money...where as before it came out of the Tax Credits and payed of slowly..now its demanded back...What is this country coming too??? There must be others out there who are as angry as us..:mad:

That was quite hard to read if I'm honest but after reading a few times I'm still not sure what your point is.

Your hubby earns over £26k a year and gets a bonus every week? How much did he actually earn last tax year and how much did you state he would earn on your tax forms?

If you put down £26k and he earned £30k then yes they overpaid, why wouldn't they want the cash back?

LunaLady

So if you are working and your Husband earns £26,000 maybe its just bad budgetting?

Sixer

Morlock wrote: »

Do you know who the biggest beneficiaries of that estimated £170.9 billion are?

Yes. Well over half of it goes on pensions and pensioner benefits. And articles always focus on how much it compares to income tax, which not only excludes other personal-type taxation such as NICs, VAT, etc, but also business taxation. Both mislead the average person and what they consider to be "benefits" as an overall component of UK income and expenditure.

Just under half, actually:

State pension - 36% of welfare bill
Housing benefit/LHA - 11%
Child tax credit - 10%
DLA - 8%
Other pensioner benefits - 6%
Child benefit - 6%
Working tax credit - 4%
ESA - 4%
Income support - 4%
JSA - 3%
Council tax benefit -3%
Carer's allowance and maternity pay - 2%

tattycath

You don't have to pay it back all in one go. You can arrange to pay in installments over a couple of years I think. Why not post an SOA and see if any of us can help with your budgeting.

BigAunty

Sixer wrote: »

... And articles always focus on how much it compares to income tax, which not only excludes other personal-type taxation such as NICs, VAT, etc, but also business taxation.
..

Yes, they do omit things like corporation tax, VAT and so forth but they also omit other expenses that need to be paid for like the armed forces, non-Uni education and so forth.

The income tax receipt/benefits expenditure imbalance is a serious one - rather than it occasionally and briefly happening during an economic turndown, without big changes, it was set to be the norm.

Spending on housing benefit doubled under the last 10 years of Labour's tenure.

Sixer

BigAunty wrote: »

Yes, they do omit things like corporation tax, VAT and so forth but they also omit other expenses that need to be paid for like the armed forces, non-Uni education and so forth.

Precisely. So the accuracy of the picture supposedly being painted - how much does UK plc take in and how much does it pay out - is meaningless when totals such as income tax and "welfare" (to include contributory old age pensions) is utterly meaningless. It's simply inflammatory to conflate "welfare" with pensions and then compare them to one income stream of many to exaggerate the expense.

BigAunty wrote: »

The income tax receipt/benefits expenditure imbalance is a serious one - rather than it occasionally and briefly happening during an economic turndown, without big changes, it was set to be the norm.

Again, a distorted picture since NICs receipts are a further £101bn - over half of which comes from employees. We aren't seriously arguing that NICs shouldn't be seen as income tax, are we? If so, why are we including pensions, contributory JSA and contributory ESA in our expense listings? Can't have it both ways.

BigAunty wrote: »

Spending on housing benefit doubled under the last 10 years of Labour's tenure.

But why is this presented solely as a welfare issue? And not a policy issue of keeping house prices up come what may to make people feel richer than they actually are and to disguise structural problems in the economy? Or a by-product of unsustainable cheap credit creating a BTL bubble, again to disguise structural problems in the economy? Why must only welfare recipients pay the price? People have to live somewhere.

None of this is to say that I don't see the need for welfare reform and I agree entirely that a high cost, low wage economy is the real problem. It's simply to say that statistics lie and in this case, statistics are being used to single out one group for all the blame, which is neither right as in correct nor right as in just.