MSE News: Are you a child benefit loser? Full Q&A

zagfles

woodbine wrote: »

at last some of the "better off" will also "all be in this together",should knock another few points off the tories poll ratings !

:rotfl:You really think so? This policy is massively popular, over 80% support in most polls. It will gain them votes, not lose them.

That's why they've done it. It's nothing to do with the deficit reduction, means testing is rarely worth it at the higher end of the income scale because the cost in bureacracy usually outweighs the savings.

It's so they can convince the numpties "we're all in it together". They probably even wanted the controversy, the cliff-edge, the "couple on £50k each vs single earner on £60k". They want it constantly in the news even for the wrong reasons, because it reminds people of a massively popular policy. Soundbite politics. The numpties will just hear all the genuine issues raised as "the rich whinging about losing benefits" and may even make it more popular!

Cr*p policy like this is usually popular, because it's simple (in principle at least, even if not in the implementation), so even Sun readers can understand it. Like the benefits cap.

Whereas good policy, like UC, is far too complicated for Sun readers to understand and so have an opinion on.

Icequeen99

zagfles wrote: »

Also of course you could be living with a friend/parent/sibling etc, which definitely wouldn't count for this, so it's very misleadling to state "any two adults who live together".

It's only "partners" in the usual DWP sense of living together as man and wife (or civil partners).

http://www.legislation.gov.uk/ukpga/2012/14/schedule/1/enacted

Exactly. I meant to say that in my first post too. HMRC are at fault as their press release also talks about living with someone.

But as with most of the press releases on tax credits and other related issues, it seems MSE take things as gospel rather than actually understanding the law themselves which would be far more helpful for the users of this site. The world doesn't need more poor quality information - we now have Gov.UK for that!

IQ

mad

zagfles wrote: »

It doesn't have to be salary sacrifice, you can contribute to a personal pension (eg a SIPP) to reduce your income for the purposes of this. Only disadvantage of this over a salary sacrifice is you miss out on the 2% NI saving (and it's a bit more bureaucratic).

Thanks Zagfles

Do you mean that someone could contribute to a SIPP from earnings and then declare that at self assessment? I did think that could only be done via salary sacrifice? Could you get the tax relief associated with personal pension contributions too?

Obviously this is all important to me as I don't want our champagne and Caviar lifestyle to be effected

Thanks for any help

Cazza1234

Just one more reason to prevent people from returning to work after having a baby.

In order to pay for 2 children to be full time in nursery I'm looking at £2k/month which means clearing £40k just to pay childcare costs and break even. If they have to cut it, then I think the child benefit should be taken away from parents who have children over 5 (as they'll be in school then and therefore no nursery fees) and perhaps in the higher tax bracket?

Cazza1234

P.S. I think the website forgot to change its clock

zagfles

mad wrote: »

Thanks Zagfles

Do you mean that someone could contribute to a SIPP from earnings and then declare that at self assessment? I did think that could only be done via salary sacrifice? Could you get the tax relief associated with personal pension contributions too?

Yes. The SIPP will reclaim the basic rate tax relief and you claim the higher rate relief via your tax return. The amount used for the child benefit charge calculation is "adjusted net income" which is basically income minus stuff like gross pension contributions/gift aid.

For example, say your income is £55,000. This would result in you losing half your child ben. You can avoid this by paying £5000 gross into your SIPP.

You pay in £4000 net and your SIPP provider claims £1000 basic rate relief. You claim the higher rate relief via your tax return (you enter the £5000 gross contribution in the appropriate box), and the taxman gives you another £1000 (this goes to you not the SIPP) which you then spend on caviar and champagne.

Also your "adjusted net income" is now £50,000 so you don't lose any child ben.

Obviously this is all important to me as I don't want our champagne and Caviar lifestyle to be effected

Indeed! And with the high effective tax relief you're getting on your pension you'll be swimming in caviar when you're retired :rotfl:

Thanks for any help

That's quite all right, we're all in this together!

michaels

zagfles wrote: »

:rotfl:You really think so? This policy is massively popular, over 80% support in most polls. It will gain them votes, not lose them.

That's why they've done it. It's nothing to do with the deficit reduction, means testing is rarely worth it at the higher end of the income scale because the cost in bureacracy usually outweighs the savings.

It's so they can convince the numpties "we're all in it together". They probably even wanted the controversy, the cliff-edge, the "couple on £50k each vs single earner on £60k". They want it constantly in the news even for the wrong reasons, because it reminds people of a massively popular policy. Soundbite politics. The numpties will just hear all the genuine issues raised as "the rich whinging about losing benefits" and may even make it more popular!

Cr*p policy like this is usually popular, because it's simple (in principle at least, even if not in the implementation), so even Sun readers can understand it. Like the benefits cap.

Whereas good policy, like UC, is far too complicated for Sun readers to understand and so have an opinion on.

Thank goodness, I thought I was the only one who understood this.

Blue22

Because we need another generation to pay your pension and look after you in old age?

The purpose of the tax and benefit system is to redistribute wealth from the 'rich' to the 'needy' OR from those with those high earnings potential to those with limited earnings potential. Hence we give money to the elderly and the disabled. But surely having a child limits your earnings potential as much and if not more than the above. That's why traditionally money has been directed from single/childless people towards families with children. Sadly that is no longer the case unless you are an unemployed/low income family.

shailalast

Not sure if anyone has already said this, but income for this purpose will be after deducting any pension contributions or gift aid payments.

For us, with 4 children, one of us earning nearly £60k, but one non earner who looks after the kids full time, we will be paying over 70% top rate of tax.

I'd rather put 100% into a pension or even give it away, than pay 70% of it over in tax to these people.

Gambler

mad wrote: »

I'm a bit confused why they have introduced the change mid tax year. Does that mean that the CB payments in the 2012/2013 year to the 7th January are unaffected?

I will probably lose about half the CB we get as I am only earner in the household and will end up getting about 55k over this year, so you can see it matters. Up to now I have budgeted to lose half from Jan, up until then will all be spent. Please don't say it will be CB for the whole of the year........

https://www.gov.uk/child-benefit-tax-calculator

I found this useful.