MSE News: Child benefit cut to hit 1 million next Monday

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  • zagfleszagfles Forumite
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    Oh, and for anyone daft enough to think everyone on £50k is "rich", no matter how many people that £50k is shared between, try this tool from the IFS, which works out how rich you are compared to everyone else, using internationally accepted equivalisation methods (same as used for "child poverty" measures):

    http://www.ifs.org.uk/wheredoyoufitin/

    Note that it uses net income, so £50k gross would be about £36k net.

    £36k net, with £2k council tax, and 4 kids 2 over 13, would be on the 27th percentile without child ben. Well inside the poorest third of the population. Yet a higher rate taxpayer! That's the UK tax system for you. So they should feel no shame wahtsoever claiming child ben.
  • edited 5 January 2013 at 8:20PM
    Icequeen99Icequeen99 Forumite
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    edited 5 January 2013 at 8:20PM
    zagfles wrote: »
    I think people are increasing realising this - many on £60k+ incomes have large amounts in savings, and if they're going to sacrifice £10k to a pension, why not go further and sacrifice more, gaining them tax credits as well, particularly if they have 3+ kids.

    With 4 kids, the tax credit limit is about £45k, or even higher with childcare, so once you start sacrificing below that level you start getting tax credits as well as child ben. Worth thinking about if you have savings to live off...

    It will be interesting to see if HMRC will increase their compliance activity to route out people making massive contributions to get below the limits.

    IQ
  • edited 3 January 2013 at 4:05PM
    MissMoneypennyMissMoneypenny Forumite
    5.3K Posts
    edited 3 January 2013 at 4:05PM
    Gentile wrote: »
    You need to get some facts right. Who bailed out the banks ? Not the tories. Who bailed out Northern crock ? Not tories. Who bailed out RBS and LLoyds ? Not tories. Who gave massive bonuses to Northern Crock employees and executives ? Not tories.

    Tories are trying to reverse the massive !!!! ups done by Labour and if they hadnt we would have lost the triple A and investors would run away and there would be no money to borrow to pay benefits !

    Able bodied benefit claimants don't understand the mess we would be in if Blair/Brown had continued.

    All they see is "me benefits are being lowered" or "they want to make me do more to keep meself and me kids". Then the occasional "Me dad always told me: Never vote Tory or it will affect your benefits when you are old enough to claim, son""
    RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
    Read the sticky on the House Buying, Renting & Selling board.


  • zagfleszagfles Forumite
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    Icequeen99 wrote: »
    Because HMRC are starting to realise this and looking for people to catch with the notional income rules. I suspect compliance activity will increase in this area where people are making massive pension contributions to gain increased entitlement to tax credits. Be interesting to see what happens on appeal in such cases.

    IQ
    Really? I don't see how they could pull the notional income rule for standard pension contributions, as the legislation deducts pension contributions after income is totalled, including notional income. They would have to add earnings, then add the same income again as notional, before deducting the pension contributions, surely this wouldn't stand up in law?

    With salary sacrifice, I always used to think it was possible for them to use the notional income rules, since you're not directly contributing but you're sacrificing salary and your employer is contributing. The manual used to tell TCO staff they had to refer any salary sacrifice other than for childcare to the TAL. But the manual has changed and there is now a list of sacrifices which don't have to be referred, and this includes pensions. See http://www.hmrc.gov.uk/manuals/tcmanual/TCM0044060.htm

    Do you know of any cases where they've used the notional income rule for pension contributions?
  • Icequeen99Icequeen99 Forumite
    3.8K Posts
    zagfles wrote: »
    Really? I don't see how they could pull the notional income rule for standard pension contributions, as the legislation deducts pension contributions after income is totalled, including notional income. They would have to add earnings, then add the same income again as notional, before deducting the pension contributions, surely this wouldn't stand up in law?

    With salary sacrifice, I always used to think it was possible for them to use the notional income rules, since you're not directly contributing but you're sacrificing salary and your employer is contributing. The manual used to tell TCO staff they had to refer any salary sacrifice other than for childcare to the TAL. But the manual has changed and there is now a list of sacrifices which don't have to be referred, and this includes pensions. See http://www.hmrc.gov.uk/manuals/tcmanual/TCM0044060.htm

    Do you know of any cases where they've used the notional income rule for pension contributions?

    I have seen one case where it was attempted but not pursued.

    Agreed, that is why I said it would be interesting to see what happened on appeal.

    Presumably though they would do what you said, they attribute an amount to notional income equal to the pension contributions which would still have to be deducted. I can't see that they can't deduct the full amount of pension contributions in any case under the Regs, the only way to do it is to in fact add in the notional income figure.

    I think they would have a hard time if it went to appeal showing that it was for the purposes of increasing entitlement to TC as opposed to ensuring they have a healthy pension pot!

    When you think about it, all pension contributions increase entitlement. Most benefit case law looks at the motivation for doing so.

    IQ
  • Icequeen99 wrote: »
    I think they would have a hard time if it went to appeal showing that it was for the purposes of increasing entitlement to TC as opposed to ensuring they have a healthy pension pot!

    If they only started their increased payments from 2012+, I assume this might show their intention to try to get welfare payments from Universal Credit?
    RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
    Read the sticky on the House Buying, Renting & Selling board.


  • Icequeen99Icequeen99 Forumite
    3.8K Posts
    If they only started their increased payments from 2012+, I assume this might show their intention to try to get welfare payments from Universal Credit?

    I imagine it might lend weight to HMRC's arguments, but then where would you draw the line. If you contribute £300 a month, that isn't deprivation (as even that amount could increase your tax credits) but a £1000 is?

    Also, if the primary motivation is to avoid the child benefit charge that isn't the same as doing it to increase tax credit entitlement which is what the legislation for notional income requires.

    IQ
  • Each to their own - the more they cut other benefits and make working pay the more votes they get.

    I was a red voter before now - but their recent changes to the benefit system have changed me and many of my friends. I think you'd be suprised.

    To cut my benefits by £150 and leave the family who can't be arsed to work with 100% would have lost a vote. To ensure they are losing too.


    Adds a vote

    do you follow the opinion polls?
    the tories cant win the next election,they would need 4% votes than in 2010 NO governing party has ever incresed their % of votes before, and this shower of *!%^ certainly wont
  • zagfleszagfles Forumite
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    Icequeen99 wrote: »
    I have seen one case where it was attempted but not pursued.
    Do you know why it wasn't pursued?
    Agreed, that is why I said it would be interesting to see what happened on appeal.

    Presumably though they would do what you said, they attribute an amount to notional income equal to the pension contributions which would still have to be deducted. I can't see that they can't deduct the full amount of pension contributions in any case under the Regs, the only way to do it is to in fact add in the notional income figure.
    Would it stand up in law to count the same income twice?
    I think they would have a hard time if it went to appeal showing that it was for the purposes of increasing entitlement to TC as opposed to ensuring they have a healthy pension pot!

    When you think about it, all pension contributions increase entitlement. Most benefit case law looks at the motivation for doing so.

    IQ
    Indeed, but the motivation could be there for a small contribution just as much as for large. Also if HMRC have never used the notional income rule for pension conts before, do you think they'd bother starting now, with tax credits in their death throes?
  • zagfleszagfles Forumite
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    woodbine wrote: »
    do you follow the opinion polls?
    the tories cant win the next election,they would need 4% votes than in 2010 NO governing party has ever incresed their % of votes before, and this shower of *!%^ certainly wont
    :rotfl:put a bet on if you're so confident! Labour aren't even odds-on to win, you'd more than double your money!

    http://sports.williamhill.com/bet/en-gb/betting/e/1112310/Next-UK-General-Election-Result.html

    In 1990 Labour were way ahead in the polls, much further ahead than now. Regularly over 50%, mostly high 40's, 15 point lead. Much bigger than now. And they lost the 1992 election.

    http://ukpollingreport.co.uk/historical-polls/voting-intention-1987-1992

    Same for the Tories in 2008, way ahead in the polls, 20 point leads, and they couldn't win outright in 2010.

    Mid term polls mean nothing.
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