Tax Credits

Generali

Shakethedisease wrote: »

Ah well. They did anyway.

http://www.theguardian.com/money/2015/oct/21/house-of-lords-table-motion-to-block-44bn-cuts-to-tax-credits

If Mr Bercow decides that this is a money bill, which from his slightly cryptic comment I would say is likely, then the Bill can just go straight from the Commons to HMQ under the Parliament Acts.

http://www.ft.com/cms/s/0/05645d9e-77eb-11e5-a95a-27d368e1ddf7.html#ixzz3pGruJEuy

After PMQs, John Bercow, the Commons Speaker, said: “In the final analysis, each house knows what the factual constitutional position is and that position is what it is of long standing.”

If the tax credits and 'living wage' (higher minimum wage) policies are taken together then there will be winners and losers presumably. The winners will be those who are very low paid but without kids that get beggur all from the welfare state. The losers will be those who are low paid with kids who get quite a lot of money from the state.

Generali

cells wrote: »

Not sure if you have £100,000 equity in a home you should be treated differently to someone who has £100,000 in a bank

Maybe home-owners that have a need for assistance should have a charge against the home for the same sum

In Australia there are two different savings levels that are used for means testing depending on whether you are a homeowner or not. In Sydney you get most means tested benefits if you are not a homeowner if you have assets of $650,000 or at least you did last time I looked. That number may well be higher now.

zagfles

cells wrote: »

Not sure if you have £100,000 equity in a home you should be treated differently to someone who has £100,000 in a bank

You aren't, for tax credits. Capital is ignored whatever form it's in. Only income (inc interest, rent etc) would count.

zagfles

Generali wrote: »

If Mr Bercow decides that this is a money bill, which from his slightly cryptic comment I would say is likely, then the Bill can just go straight from the Commons to HMQ under the Parliament Acts.

http://www.ft.com/cms/s/0/05645d9e-77eb-11e5-a95a-27d368e1ddf7.html#ixzz3pGruJEuy

Indeed.

If the tax credits and 'living wage' (higher minimum wage) policies are taken together then there will be winners and losers presumably. The winners will be those who are very low paid but without kids that get beggur all from the welfare state. The losers will be those who are low paid with kids who get quite a lot of money from the state.

The low paid without kids can get tax credits. Also many low paid with kids don't get tax credits for various reasons (eg partner earning a decent wage).

Those on low incomes who rent won't usually be affected too much as HB/LHA would make up most of the loss in tax credits. The main losers in all this are those on average incomes eg around £20-25k who claim tax credits.

zagfles

skintpaul wrote: »

Should I start a TC claim after I start new job, and get some payslips as backup, or do one beforehand, to get things rolling?

Apply as soon as you're entitled eg work enough hours. I presume you aren't already getting CTC? You don't need payslips to apply. It can only be backdated a month so apply as soon as you start.

tibawo

zagfles wrote: »

Indeed. The low paid without kids can get tax credits. Also many low paid with kids don't get tax credits for various reasons (eg partner earning a decent wage).

Those on low incomes who rent won't usually be affected too much as HB/LHA would make up most of the loss in tax credits. The main losers in all this are those on average incomes eg around £20-25k who claim tax credits.

It would seem that I am going to be better off if I work less hours. More so when I then factor in free school meals, rent etc. ... It was the other way round until the last lot of cuts!

The worse part of it is when government departments ask how many hours you work and because I have zero hours and can't accurately work out a future average, one guy said I must ring in weekly! He did not seem to understand that I had waited fifty mins to talk to him and had to pay for the call. Other staff were better.

andrewmp

cells wrote: »

wont a lot of the tax credit cuts be made up by housing benifit increases?

I just put in some numbers for a couple with one baby so just one of them working and getting £10,000 wage living in a rented home in NW-London.

The tax credit cuts were aprox £30 per week, however the housing benifits increase more than made up for it

What if you've got a mortgage, you won't be getting any housing benefit therefore you won't see any increase in housing benefit.

MFW_ASAP

michaels wrote: »

According to this:

http://www.ons.gov.uk/ons/dcp171766_305977.pdf

20% of households aged 50-64 have higher value pension pots than I do so have probably benefited from more tax releif than I have.

I know nothing of your circumstances but the reason I have a large pension pot is because I minimise my expenditure. No Sky, no iphone, holidays with relatives in the UK, value line food, cheapest mortgage rate etc as I value being financially secure over such things. Other lifestyle preferences are available and equally valid, complaining that I have more savings whilst not recognising what I have gone without to acheive them is not.

I thought you were like myself and had a large mortgage (to go with a large house)? How do you afford to pay both a large mortgage and have such a reduced income?

I'd be interested in paying a lot more into my pension but my current outgoings restrict that (we have freesat, etc.)

How've you managed it?

michaels

MFW_ASAP wrote: »

I thought you were like myself and had a large mortgage (to go with a large house)? How do you afford to pay both a large mortgage and have such a reduced income?

I'd be interested in paying a lot more into my pension but my current outgoings restrict that (we have freesat, etc.)

How've you managed it?

IO and loads of savings (which could pay of the mortgage but don't as they earn more than the mortgage costs and offer flexibility) which are not assessed for tax credits (but will be for Universal Credit). And of course being tighter than a gnats proverbial....

MFW_ASAP

michaels wrote: »

IO and loads of savings (which could pay of the mortgage but don't as they earn more than the mortgage costs and offer flexibility) which are not assessed for tax credits (but will be for Universal Credit). And of course being tighter than a gnats proverbial....

Ah, righto. I was IO with my mortgage at first, but found it increasingly difficult to get one without jumping through hoops.

I did consider reducing my income a few years ago when I was working as a contractor, but I wanted to blitz our mortgage (this was before we bought the dream home) and Mrs MFW wanted holidays and such. All I managed to do was to reduce my tax bill via dividends and the 10% entrepreneurs allowance.

I suspect that, as usual, a lot of the 'moral highground' talk is coming from a background of envy at your £60k salary, rather than your tax avoidance scheme. I used to get the same when I posted financial details on this particular forum. Out of interest, what is your pension pot, and what's your retirement aim?


My pension pot is now £168k (at age 47), with a £4k final salary pension that kicks in at age 65. My aim is to try and retire early, pretty much at the convergence of the following: once the pension pot reaches £400k, when my mortgage reaches zero and when my energy efficiency renovations are completed. Basically, the more I reduce my outgoings (zero mortgage, low utility bills) the sooner I can retire.