Staying under £100K to keep 15/30 hours free childcare

borkid

fabforty wrote: »

I thought it was free childcare, not housing benefit.

The HB referred to the person in another post not the OP.

haras_nosirrah

I suppose from the op's perspective it is kind of like earn 99k and get 30 free hours childcare, earn 100k and pay £1000 a month for childcare (possibly more depending on number of children) - while these kind of cliff hangers exist can anyone blame the op for using the legal tax advantages available?

Tabbytabitha

xylophone wrote: »

Can you explain this assertion?

https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay

For example, it is recognised that pension contributions

may mean you’re entitled to tax credits or an increase in the amount of tax credits you get (although you may not get this until the next tax year)
mean you’re entitled to an income-related benefit or an increase in the amount of benefit you get

Your link is to workplace pensions which doesn't seem to be relevant to the current discussions. Are you saying that someone living on means tested benefits could put a large inheritance straight into a pension without it being considered deprivation?

If that's really the case I'm sure many people would be interested in how they can do that.

Darksparkle

haras_nosirrah wrote: »

I suppose from the op's perspective it is kind of like earn 99k and get 30 free hours childcare, earn 100k and pay £1000 a month for childcare (possibly more depending on number of children) - while these kind of cliff hangers exist can anyone blame the op for using the legal tax advantages available?

That’s where this system is stupid.

You could have a couple both earning £99,000 each and receiving 30hrs free childcare and tax free childcare but another couple with one earning £101,000 and receiving no help.

Unimaginativeusername

What an absolute cheek! You earn £100k a year, why should I pay for your childcare?

haras_nosirrah

Tabbytabitha wrote: »

Your link is to workplace pensions which doesn't seem to be relevant to the current discussions. Are you saying that someone living on means tested benefits could put a large inheritance straight into a pension without it being considered deprivation?

If that's really the case I'm sure many people would be interested in how they can do that.

I'm a non-earner or earn less than £3,600
You can receive 20% tax relief even if you are a low or non-earner. Your pension contribution limit is £3,600 gross - a payment of £2,880 to which the taxman adds £720. This is the case even for people who don't pay tax, such as most children and non-earning spouses.

BorisThomson

haras_nosirrah wrote: »

I suppose from the op's perspective it is kind of like earn 99k and get 30 free hours childcare, earn 100k and pay £1000 a month for childcare (possibly more depending on number of children) - while these kind of cliff hangers exist can anyone blame the op for using the legal tax advantages available?

So it's ok for a high earner to use "legal tax advantages" (loopholes), but not for someone dependent on means tested benefits to use legal methods of depriving themselves of capital?

(Or how about people play fair and, in either circumstance, pay their own way where they can?)

haras_nosirrah

BorisThomson wrote: »

So it's ok for a high earner to use "legal tax advantages" (loopholes), but not for someone dependent on means tested benefits to use legal methods of depriving themselves of capital?

(Or how about people play fair and, in either circumstance, pay their own way where they can?)

legal methods to deprive themselves of capital are fine - replacing their old banger, 10 year old appliances, thread bear carpets, taking a non extravigant holiday, buying a house to live in - all perfectly legal ways of reducing their capital. Giving 100k to their children, buying a top of the range sports car, going on a month long holiday to the bahamas are not legal means of depriving themselves of capital

someone getting a 25k inheritance could very easily spend 9k to get below the 16k level by doing some of the things I have mentioned and in doing so can substantially improve their lives - all legal and above board. Just keep receipts and make sure it is considered legitimate spending.

Darksparkle

I’d be very interested to know if anyone has ever been considered depriving themselves of income for paying into a pension. I’ve never seen it.

LilElvis

t0rt0ise wrote: »

Rubbish! She was asking what she could do to stay within the rules but still get housing benefit. It's exactly the same as here. What can he do to stay within the rules but still get free child care. It's exactly the same. The OP earns enough and doesn't need free child care so why not tell him so?

You have no idea what his outgoings are to make that assertion. Even if he does reduce his taxable income in order to receive the free childcare he will still be paying a high level of tax and national insurance.