Everyone lost in the Ether II

Nannylala

Another one going up the wooden hill ...night night :A

harryhfp

michaels wrote: »

They have missed a trick, B could also pay 2880 into their pension and have it topped up by the govt to 3600 which could also be offset against their tax credits income. Plus if A actually earned 60k they would also benefit from not losing 2.4k of child benefit that they would otherwise lose.

They need to be careful about the 5k final income because if it is a reduction from previous years then 2.5k will be added for tax credits calc purposes so the actual assessment will need to be done on 7.5k which may be into the withdrawal band.

Also A as well as having the 40k annual allowance may well have rollover allowance from the previous 3 years when the allowance was 50k, 50k then 40k.

With the full ctc amount they should also be able to get school music lessons at 50% discount.

They can also use the married couples tax allowance which as a higher rate tax payer they wouldn't have been able to worth 200 quid.

It would be nice if they could also get free school meals but to do so they would have to give up wtc which is more even with 3 kids. Depending on assets they might also be able to look at council tax benefit and if they rent, housing benefit.

Finally had they been able to do salary sacrifice rather than personal pension contributions they would save on NI and potential get a share of the employers NI.

I do all the above.

bumpety bump

harryhfp

michaels wrote: »

They have missed a trick, B could also pay 2880 into their pension and have it topped up by the govt to 3600 which could also be offset against their tax credits income. Plus if A actually earned 60k they would also benefit from not losing 2.4k of child benefit that they would otherwise lose.

They need to be careful about the 5k final income because if it is a reduction from previous years then 2.5k will be added for tax credits calc purposes so the actual assessment will need to be done on 7.5k which may be into the withdrawal band.

Also A as well as having the 40k annual allowance may well have rollover allowance from the previous 3 years when the allowance was 50k, 50k then 40k.

With the full ctc amount they should also be able to get school music lessons at 50% discount.

They can also use the married couples tax allowance which as a higher rate tax payer they wouldn't have been able to worth 200 quid.

It would be nice if they could also get free school meals but to do so they would have to give up wtc which is more even with 3 kids. Depending on assets they might also be able to look at council tax benefit and if they rent, housing benefit.

Finally had they been able to do salary sacrifice rather than personal pension contributions they would save on NI and potential get a share of the employers NI.

I do all the above.

harryhfp wrote: »

OK I'm going to have a stab at the £40K pension contribution scenario.


The married couple A & B have earnings as follows: A £50K, B self employed with a loss-making business -£5K.


A pays the maximum £40K into her pension. She will actually pay £32K as the pension provider will claim back basic rate tax from HMRC - this is £8K making the total £40K.


A claims back another £8K through her self assessment tax return because she is a higher rate tax payer. So she has actually (net) paid £24K to get £40K of pension contributions.


Because A & B are entitled to tax credits, they need to calculate their joint income. Personal pension contributions are offset against A's income, as is B's business loss. So £50K of income minus £40K of pension contributions, minus £5K of B's business loss = £5K.


A & B have 3 children so they will get the full tax credit entitlement for 2015/16 = c.£13K.


They will also benefit from a reduction in A's income tax (because of the pension contributions) = a rebate of about £2K, a rule I do not understand, perhaps somebody will explain?


So effectively thanks to tax relief on pensions contributions & the way the tax credit system works, A & B are entitled to approx. £31K of help from the Govt.


The main disadvantage is that pensions bring their own problems, including inflexibility/ poor access to money/ risks of investing etc. However, the new rules on making it easier to get access to your money tied up in pensions make this less of an issue than in the past.


http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions
http://www.which.co.uk/money/tax/guides/tax-credits/working-tax-credits-how-much-you-get/

rumpety rump

harryhfp

oops but now you can see both posts

miss_corerupted

We are getting a puppy!!!! She is coming on the 24th (just a coincidence) booking her in for her 8 week injections on the 24th. We have another 3 dogs on the farm so I know we have to keep her apart from them for a while.

She's going to have to stay in the house for a few weeks so what do I need for her??

Very excited she is a Welsh Collie bob tail

she'll look a bit like this https://www.google.co.uk/search?q=welsh+bobtail+collie&safe=off&rlz=1C1CHWA_enGB653GB653&espv=2&biw=1366&bih=643&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwj00ZzQrc3JAhVDiRoKHWuTBSQQsAQIHg#imgrc=S9-6U4zDQYk9xM%3A

when she's bigger

harryhfp

Nannylala wrote: »

Another one going up the wooden hill ...night night :A

lightweight lol

izzy65

miss_corerupted wrote: »

We are getting a puppy!!!! She is coming on the 24th (just a coincidence) booking her in for her 8 week injections on the 24th. We have another 3 dogs on the farm so I know we have to keep her apart from them for a while.

She's going to have to stay in the house for a few weeks so what do I need for her??

Very excited she is a Welsh Collie bob tail

she'll look a bit like this https://www.google.co.uk/search?q=welsh+bobtail+collie&safe=off&rlz=1C1CHWA_enGB653GB653&espv=2&biw=1366&bih=643&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwj00ZzQrc3JAhVDiRoKHWuTBSQQsAQIHg#imgrc=S9-6U4zDQYk9xM%3A

when she's bigger

Congratulations, lovely having a puppy, is she going to be a working dog

Sarahdol75

miss_corerupted wrote: »

We are getting a puppy!!!! She is coming on the 24th (just a coincidence) booking her in for her 8 week injections on the 24th. We have another 3 dogs on the farm so I know we have to keep her apart from them for a while.

She's going to have to stay in the house for a few weeks so what do I need for her??

Very excited she is a Welsh Collie bob tail

she'll look a bit like this https://www.google.co.uk/search?q=welsh+bobtail+collie&safe=off&rlz=1C1CHWA_enGB653GB653&espv=2&biw=1366&bih=643&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwj00ZzQrc3JAhVDiRoKHWuTBSQQsAQIHg#imgrc=S9-6U4zDQYk9xM%3A

when she's bigger

Awww lovely, we need photos when you get her.

Nannylala

harryhfp wrote: »

lightweight lol

Not lightweight Harry just getting on a bit in years lol. Night night .x

harryhfp

Nannylala wrote: »

Not lightweight Harry just getting on a bit in years lol. Night night .x

Nighty night, got to hit the white sheets soon myself as I'm going to be bombing around Cornwall making £5s on Amex tomorrow!