parent earning over £50k

tomtontom

MissMoneypenny wrote: »

They aren't cheating the system. The government are encouraging people to save for their old age so that they aren't a burden to to the welfare state for years. On those wages, they will be paying a lot in taxes and no doubt will pass their good work ethic onto their children, so that they too won't be a burden to the welfare state. It's money well invested by the govenment.

They don't get a pay rise for every child they have; unlike those on the benefit Tax Credits, who ask for more Tax Credits with every baby they have.

Those cheating the system are being dealt with by all the welfare reforms and other welfare cap plans.

Maybe not cheating but certainly playing the system. I'm not sure one is better than the other!

haras_nosirrah

heartbreak_star wrote: »

I'll remain sceptical. If I earned >£50k I wouldn't be trying to wangle my wages on paper to <£50k to claim it.

YMMV.

HBS x

really? Put it into maths

if they earn 50k then they get a net wage of £3011 a month plus child benefit of £146 a month so total of £3157

if they earn 60k they get £3495 so an extra £338 a month thereby losing nearly £6000 of their £10,000 to tax and loss of child benefit

or they can salary sacrifice the £10,000 into their pension and therefore their £10,000 pension boost only costs them £4056

Who else wouldn't do the same? Perfectly legal and this is someone who pays £18k a year in tax and NI

SkyeKnight

Bobl wrote: »

The rules are pretty simple, if one parent earns more than £50K you have two choices:

1. Opt out of receiving it.
2. Claim it and Pay it back through the Tax system

As stated above your total pay for the year will be taken into account including bonuses so I would have through you are better off Opting out. If you don't you should be paying it into a separate account so it is readily available when you have to pay it back through tax.

You only lose all of Child Benefit when your pay reaches £60k. It is tapered away at 1% for every £100 you earn between £50k and £60k. As you are earning close to £50k you should not do as advised above, but continue to claim Child Benefit. At worst you will have to pay back a small part of it.

xylophone

http://www.theguardian.com/money/2013/sep/28/child-benefit-pension-contributions-higher-earners

http://www.pruadviser.co.uk/content/support/technical_centre/child_benefit_trap/

http://www.unbiased.co.uk/news/How-to-avoid-the-child-benefit-tax-charge/1966

http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/child-benefit-charge-planning

might be of interest to the OP

zagfles

SkyeKnight wrote: »

You only lose all of Child Benefit when your pay reaches £60k. It is tapered away at 1% for every £100 you earn between £50k and £60k. As you are earning close to £50k you should not do as advised above, but continue to claim Child Benefit. At worst you will have to pay back a small part of it.

Or check your situation towards the end of the tax year and make a pension contribution to take your income down to £50k if you're over.

zagfles

heartbreak_star wrote: »

This might sound a bit odd, but surely on that fairly hefty salary you shouldn't be looking to essentially cheat the system to claim a small benefit you shouldn't need with that income?

Maybe I'm wrong.

HBS x

It's no more "wrong" than using an ISA to avoid tax on interest. Pension contributions, within limts, are specifically allowable deductions for tax, tax credits and the child ben "high income charge". Using something that's specifically allowed is not "cheating".

DaveTheMus

Even with a family income of £80'000 per year you don't want to put the begging bowl away.....

evenasus

zagfles wrote: »

It's no more "wrong" than using an ISA to avoid tax on interest.

I don't agree.
Aren't tax credits money given to you from the government which is taken from tax payers?

An ISA is a savings account (from earned money you've already paid tax on) which does not generate tax for the government. The government are not giving the ISA holder money.

lukieboy96

Wow earning that much and want benefits!! No wonder things are so bad

zagfles

evenasus wrote: »

I don't agree.
Aren't tax credits money given to you from the government which is taken from tax payers?

Yes, and? The OP is a taxpayer. He's reducing the net amount of money he's paying the govt, just like someone who takes out an ISA is.

An ISA is a savings account (from earned money you've already paid tax on) which does not generate tax for the government. The government are not giving the ISA holder money.

Oh I see, so if the govt charges someone say £6000 tax and repays them £1000 in benefits, that is very wrong, but if they only charge them £5000 tax and pay them nothing, that's OK is it? Finding ways to reduce tax (eg ISA's) is OK but finding ways to increase benefits isn't - even if the net result is the same?

Maybe we should go for a French style tax system where non earners can use their tax allowance, that would be far more beneficial to the likes of the OP as they'd pay far less tax, and there would be no payable benefits to wind up the "benefits should only be for those who need them" brigade.