More confused than ever about child benefit taxation after talking to HMRC!

waccamole

zagfles wrote: »

Your post above is confusing. You say your "P60 gross income" is over £60,000 but your "post salary sacrifice" income is less? That can't be, if it's actually "salary sacrifice" then that will lower your P60 income. That's the whole point of salary sacrifice.

OK - so my P60 shows my post salary sacrifice income for the tax year. Not, as the words 'gross P60 income' made me think, my pre salary sacrifice income.

So what I should have said was my pre salary sacrifice annual income is over £60K but my post salary sacrifice annual income is quite a bit below £60K due mainly to pension payments but also medical ins, group life assurance, sickness and accident cover, childcare vouchers, extra vacation and company car contribution.

zagfles wrote: »

Salary sacrifice for stuff that's not taxable is the best way to go, eg pension, extra leave etc.

The only items where a taxable amount is added back in on my most recent tax calculation from HMRC are car benefit and medical insurance payments so presumably these are the only benefits that are taxable?

I've tried to look up on the HMRC website to confirm what 'stuff' is not taxable but I've not found a helpful answer - can't find anything about leave (or holiday or vacation).

chrismac1

What a mess! 500,000 extra folk in SA, many in marginal seats. An extra £25m spent per year to adminster the damn thing. Rules being made up on the hoof.

The Tories only chance is to get Boris in so he can axe this idiot at number 11.

waccamole

Cook_County wrote: »

Well...actually nobody knows - including HMRC; as most of the details are still to be invented. Let's see what happens on 5th December, if anything.

What's the significance of 5th December?

waccamole

zagfles wrote: »

What part specifically don't you understand? It's "total of the individual’s income subject to income tax less specified deductions", which it lists. If you're an employee with no other income, and you don't contribute to a personal pension or use gift aid, it's your P60 income plus your P11D (taxable benefits). Then there's the stuff about trade unions/police etc which probably won't apply (most trade union subs aren't tax deductable).

Sorry if I'm being dense - but then again if it's that simple why can't HMRC give me a straight forward answer

I think it was the pensions stuff that was confusing me. I think I've got it now.

Your explanation above is far better than anything on the HMRC website.

Now to see if that's what is actually implemented...

dori2o

waccamole wrote: »

What's the significance of 5th December?

The Chancelors Autumn Statement (what was previously known as the pre-budget statement) where the Chancellor lies to us all, making us think he has an idea of what hes doing, then tells us how he intends to shaft each and every one of us who isn't a Tory donator come the actual Budget in March next year.

zagfles

waccamole wrote: »

OK - so my P60 shows my post salary sacrifice income for the tax year. Not, as the words 'gross P60 income' made me think, my pre salary sacrifice income.

So what I should have said was my pre salary sacrifice annual income is over £60K but my post salary sacrifice annual income is quite a bit below £60K due mainly to pension payments but also medical ins, group life assurance, sickness and accident cover, childcare vouchers, extra vacation and company car contribution.



The only items where a taxable amount is added back in on my most recent tax calculation from HMRC are car benefit and medical insurance payments so presumably these are the only benefits that are taxable?

I've tried to look up on the HMRC website to confirm what 'stuff' is not taxable but I've not found a helpful answer - can't find anything about leave (or holiday or vacation).

Leave isn't taxable, it's time off, it's like working less. Extra holiday is basically unpaid leave - you don't pay tax on the money you didn't earn.

I think you have your answer above as to what else is taxable and what's not.

waccamole

chrismac1 wrote: »

What a mess! 500,000 extra folk in SA, many in marginal seats. An extra £25m spent per year to adminster the damn thing. Rules being made up on the hoof.

The Tories only chance is to get Boris in so he can axe this idiot at number 11.

And don't get me started on two partners earning £49K versus one on £60,001!!

waccamole

zagfles wrote: »

Leave isn't taxable, it's time off, it's like working less. Extra holiday is basically unpaid leave - you don't pay tax on the money you didn't earn.

That makes perfect sense - I'm giving them back what they would've paid me. Eureka!

waccamole

dori2o wrote: »

The Chancelors Autumn Statement (what was previously known as the pre-budget statement) where the Chancellor lies to us all, making us think he has an idea of what hes doing, then tells us how he intends to shaft each and every one of us who isn't a Tory donator come the actual Budget in March next year.

:rotfl:And it's not even in the autumn...

zagfles

chrismac1 wrote: »

What a mess! 500,000 extra folk in SA, many in marginal seats. An extra £25m spent per year to adminster the damn thing. Rules being made up on the hoof.

The Tories only chance is to get Boris in so he can axe this idiot at number 11.

You don't get politics do you? The child ben change is unfair, complex, creates perverse incentives, and will probably cost more than it'll save. Yet it's hugely popular, over 80% support - see http://yougov.co.uk/news/2010/10/06/child-benefits-reaction/

Reason is it's a good soundbite, it's easy for even Sun readers to understand in principle, the "rich" losing child benefit. The fact that it's unfair and complex to implement is beyond them.

The policy was deliberately vague to start with, the govt wanted the complaints about the cliff-edge nature of the original proposal, they wanted it kept in the headlines because all the time it was "rich losing benefits" all over the papers.