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

zagfles

dori2o wrote: »

What about 50/50 care where a step-parent may not know whether his partner, or his partner's ex, is claiming the child ben. Only 1 person is in receipt of Child benefit in 50/50 care cases, it isn't split between the 2 of them. therefore it will only apply to the household in receipt of ChB.

I know. My point was that a step-parent may not know which household that is (particularly if they've split by the time he does his tax return).

I'm not saying this is the right way to go about it. I'm trying to give helpful information to those who this may affect. If you have a problem with the policy I'm not the person to be venting your frustrations at. Your MP's contact details can be found on the web.

Sorry that's not what I'm doing (not in my PP anyway), sorry if it came across that way. I'm just interested in how this is going to be implemented technically and you seemed to understand...

IMO, the easiest way to sort this problem is to get rid of the ChB office and add the current ChB to Tax Credits/Universal Credits. Therefore it is paid correctly at the time of issue rather than having it affect peoples tax codes/self assessments. Yes, although the problem with this is that people with savings wouldn't get child ben (under UC) and it would be tapered at a much lower level of income generally. Unless you start introducing different capital rules and thresholds for the "child ben" element of UC which would complicate it massively... (sort of like the family element of tax credits when it took over from the tax allowance)

fbsf

Can someone answer something for me - lets say I earn £51k, but pay £3k pa into my company pension, although isn't a direct salary sacrifice (the deduction appears on my payslip). Am I still going to be liable to pay some of the child benefit back through SA/PAYE?

John_Pierpoint

That will keep your taxable pay below £50k ll ; do you have other sources on taxable income, such as taxable savings interest?

fbsf

Hi, thanks for the quick response! No - all our savings are offset against a smart mortgage (i.e. no interest earned), so my primary income is my only income.

10freckles

:mad: Could anyone tell me what is the definition of living together as man and wife? My OH would happily tell the tax man he never "gets any";););)

I am still unsure if the amount I pay towards my pension under a salary sacrifice scheme can be taken away from my salary to leave me with less of a charge?

I was considering increasing this amount, but that will still mean less cash in my bank every payday, so it doesnt really offset the month to month effect does it?

dori2o

10freckles wrote: »

:mad: Could anyone tell me what is the definition of living together as man and wife? My OH would happily tell the tax man he never "gets any";););)

I am still unsure if the amount I pay towards my pension under a salary sacrifice scheme can be taken away from my salary to leave me with less of a charge?

I was considering increasing this amount, but that will still mean less cash in my bank every payday, so it doesnt really offset the month to month effect does it?

If you pay into the pension via your salary, then the figure on your P60 each year takes into account that you have made these payments. Therefore unless you make contributions to a seperate pension, or give to Charities, then the amount on your P60 is the figure you should use when working out if you qualify for the benefit payments, or whether you will lose all or some of the benefit.

Trenny_2

Hi all

Can you confirm please, as I am being a bit thick.

If I earn £49k and have a company car and fuel benefit then is my adjusted income my salary + car benefit (BIK Amount) + fuel benefit (BIK Amount?

eg £49,000 + £5000 for car + £4000 for private fuel = £58k.

I understand that I can deduct pension contributions but cant get my head around what they are doing on company cars.

Thanks very much

dori2o

Trenny wrote: »

Hi all

Can you confirm please, as I am being a bit thick.

If I earn £49k and have a company car and fuel benefit then is my adjusted income my salary + car benefit (BIK Amount) + fuel benefit (BIK Amount?

eg £49,000 + £5000 for car + £4000 for private fuel = £58k.

I understand that I can deduct pension contributions but cant get my head around what they are doing on company cars.

Thanks very much

Thats right.

Your total income includes all salaries, benefits in kind (car/fuel/medical etc), profits, investment income, etc

from this you can deduct pension contributions, gift aid payments, job expenses, professional fees, etc.

This leaves you with your Net Adjusted Income.

trenny

Thanks for that.

So, if my company does not have a pension scheme I assume I will need to get my own and pay about £8k into it a year in order to get below the £50k mark. Or lose the child benefit for my 4 kids.

In addition to all the tax I pay and have done for 30 years. Whilst my neighbors enjoy their £98k + Child Benefit, I can continue to work 60 hours a week in a high pressure job and still struggle to support the mortgage and ever increasing bills. Whilst I am at it, I can also benefit enormously from the knowledge the my tax payments are being put to good use by creating more government red tape and bureaucracy implementing unmanageable and completely inconsistent taxation policies. Luckily I can still feel great about encouraging teenagers to have babies so I can contribute to getting them a house and new washing machine just down my street.

Government wont lose many votes over this as all the under £50k people are loving it. I think I might join them and just work less, earn less and contribute less tax.

Actually, I have no real problem with losing this benefit as we all need to do our bit to get the UK back on it's feet, even though it will hurt my family financially. Even on a £50k salary it's tough these days and much less take home pay than a couple on £25k each. I do have issue with the unfairness. They should have taken less from more people and based it on household income. Moreover, they are now forcing people to declare their incomes to partners and could be putting couples off moving in together and potentially creating a better environment for their kids.

Rant over, when do we vote next?

John_Pierpoint

The rant thread is over here in the ghetto:

https://forums.moneysavingexpert.com/discussion/4257397