Single salary household question
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sleepysocks
Posts: 18 Forumite
Hi all,
I hope I've posted this in the right section!
Due to the crazy costs of childcare, my partner and I have decided that one of us is going to give up work as it will work out better financially.
My question is: What will that mean for the income tax and national insurance payments for the parent that isn't working anymore? Will we need to notify anyone?
Thank you in advance for the advice
I hope I've posted this in the right section!
Due to the crazy costs of childcare, my partner and I have decided that one of us is going to give up work as it will work out better financially.
My question is: What will that mean for the income tax and national insurance payments for the parent that isn't working anymore? Will we need to notify anyone?
Thank you in advance for the advice
0
Comments
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None whatsoever. We have this daft and hypocritical system of "independant taxation" so income tax and NI is the same, regardless of how many people the earnings support.
But benefits/tax credits are not independant, so if you get tax credits or UC you could get more if one of you gives up work, or you could become eligible.
The one who gives up work should be the one who claims child benefit, as they get NI credits towards the state pension.0 -
Thank you so much for the super quick reply zagfles! Sorry if I am being a bit blonde, but does that mean the parent that doesn't work will still have to pay the income tax, if if they don't have a salary?0
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sleepysocks wrote: »Thank you so much for the super quick reply zagfles! Sorry if I am being a bit blonde, but does that mean the parent that doesn't work will still have to pay the income tax, if if they don't have a salary?
The parent who isn't working will have no income so no income tax or NI etc. They might be due a refund of tax paid earlier in the year. Very important that the non-earner claims the child benefit to get NI credits.0 -
Fab tip about the child benefit! I'll definitely get on to that...feel much better now - thank you ever so much for your time0
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I think the non-working person can transfer £1000 of their tax-free allowance to the working person if that person is a spouse/civil partner.Make £2024 in 2024
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Total £279.03/£2024 13.8%Make £2023 in 2023Water sewerage refund: £170.62,Topcashback: £243.47, Prolific: to 31/12/23 £975, Haggling: £45, Wombling(Roadkill): £6.04, Chase CB £149.34, Chase roundup interest £1.35, WeBuyBooks:£8.37, Misc sales: £406.59, Delay repay £22, Amazon refund £3.41, EDF Smart Meter incentive £100, Santander Edge Cashback-Fees: £25.14, Octopus Reward £50, Bank transfer incentives £400Total: £2606.33/£2023 128.8%0 -
Actually, you may be able to tweak your tax to your benefit. See here:
https://www.moneysavingexpert.com/family/marriage-tax-allowanceBut a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll0 -
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theoretica wrote: »Actually, you may be able to tweak your tax to your benefit. See here:
https://www.moneysavingexpert.com/family/marriage-tax-allowance
Wow I had no idea! Certainly food for thought..thank you for sharing.0 -
Also, put any savings into the name of the non-taxpayer, so you avoid tax on the interest.0
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I think the non-working person can transfer £1000 of their tax-free allowance to the working person if that person is a spouse/civil partner.
That depends on the earnings of the working spouse. I'm a SAHM and my husband earns too much so my tax free allowance goes unused, though I would guess this wouldn't apply to the OP given the brief outline of their situation.0
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