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  • FIRST POST
    • sleepysocks
    • By sleepysocks 3rd Feb 18, 6:00 PM
    • 18Posts
    • 440Thanks
    sleepysocks
    Single salary household question
    • #1
    • 3rd Feb 18, 6:00 PM
    Single salary household question 3rd Feb 18 at 6:00 PM
    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
Page 1
    • zagfles
    • By zagfles 3rd Feb 18, 6:09 PM
    • 13,196 Posts
    • 11,203 Thanks
    zagfles
    • #2
    • 3rd Feb 18, 6:09 PM
    • #2
    • 3rd Feb 18, 6:09 PM
    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.
    • sleepysocks
    • By sleepysocks 3rd Feb 18, 6:12 PM
    • 18 Posts
    • 440 Thanks
    sleepysocks
    • #3
    • 3rd Feb 18, 6:12 PM
    • #3
    • 3rd Feb 18, 6:12 PM
    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?
    • zagfles
    • By zagfles 3rd Feb 18, 6:16 PM
    • 13,196 Posts
    • 11,203 Thanks
    zagfles
    • #4
    • 3rd Feb 18, 6:16 PM
    • #4
    • 3rd Feb 18, 6:16 PM
    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?
    Originally posted by sleepysocks
    Sorry I misread your post, I thought you were asking about the parent who is still working. Their tax and NI will stay the same.

    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.
    • sleepysocks
    • By sleepysocks 3rd Feb 18, 6:29 PM
    • 18 Posts
    • 440 Thanks
    sleepysocks
    • #5
    • 3rd Feb 18, 6:29 PM
    • #5
    • 3rd Feb 18, 6:29 PM
    Fab tip about the child benefit! I'll definitely get on to that...feel much better now - thank you ever so much for your time
    • Slinky
    • By Slinky 3rd Feb 18, 6:56 PM
    • 5,241 Posts
    • 24,219 Thanks
    Slinky
    • #6
    • 3rd Feb 18, 6:56 PM
    • #6
    • 3rd Feb 18, 6:56 PM
    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.
    • theoretica
    • By theoretica 3rd Feb 18, 6:57 PM
    • 5,215 Posts
    • 6,481 Thanks
    theoretica
    • #7
    • 3rd Feb 18, 6:57 PM
    • #7
    • 3rd Feb 18, 6:57 PM
    Actually, you may be able to tweak your tax to your benefit. See here:
    https://www.moneysavingexpert.com/family/marriage-tax-allowance
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • sleepysocks
    • By sleepysocks 3rd Feb 18, 6:57 PM
    • 18 Posts
    • 440 Thanks
    sleepysocks
    • #8
    • 3rd Feb 18, 6:57 PM
    • #8
    • 3rd Feb 18, 6:57 PM
    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.
    Originally posted by Slinky
    That's handy to know! I'll certainly look into this - thank you
    • sleepysocks
    • By sleepysocks 3rd Feb 18, 6:59 PM
    • 18 Posts
    • 440 Thanks
    sleepysocks
    • #9
    • 3rd Feb 18, 6:59 PM
    • #9
    • 3rd Feb 18, 6:59 PM
    Actually, you may be able to tweak your tax to your benefit. See here:
    https://www.moneysavingexpert.com/family/marriage-tax-allowance
    Originally posted by theoretica
    Wow I had no idea! Certainly food for thought..thank you for sharing.
    • marlot
    • By marlot 3rd Feb 18, 7:19 PM
    • 3,499 Posts
    • 2,613 Thanks
    marlot
    Also, put any savings into the name of the non-taxpayer, so you avoid tax on the interest.
    • LilElvis
    • By LilElvis 3rd Feb 18, 7:23 PM
    • 3,642 Posts
    • 9,954 Thanks
    LilElvis
    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.
    Originally posted by Slinky
    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.
    • DigForVictory
    • By DigForVictory 3rd Feb 18, 7:43 PM
    • 7,817 Posts
    • 22,991 Thanks
    DigForVictory
    Bear in mind the NI credits only last til the child is 12 - at which point you may want to rearrange your times & finances a bit.
    A while ahead, but worth keeping an eye on.
    • paddedjohn
    • By paddedjohn 3rd Feb 18, 10:32 PM
    • 7,153 Posts
    • 7,797 Thanks
    paddedjohn
    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.
    Originally posted by Slinky
    Worth about 4 a week.
    Be Alert..........Britain needs lerts.
    • Mrs Soup
    • By Mrs Soup 4th Feb 18, 4:33 PM
    • 525 Posts
    • 1,059 Thanks
    Mrs Soup
    If one of your stops working mid tax year then that person may get a refund of any tax already paid that year which is easy to arrange by contacting HMRC.
    • zagfles
    • By zagfles 4th Feb 18, 6:14 PM
    • 13,196 Posts
    • 11,203 Thanks
    zagfles
    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.
    Originally posted by Slinky
    Oooh yes forgot about that! Good point.
    • somethingcorporate
    • By somethingcorporate 4th Feb 18, 6:41 PM
    • 8,875 Posts
    • 8,583 Thanks
    somethingcorporate
    Worth about 4 a week.
    Originally posted by paddedjohn
    200 a year for not much effort, seems worth it to me!
    Thinking critically since 1996....
    • Comms69
    • By Comms69 5th Feb 18, 11:58 AM
    • 2,970 Posts
    • 2,939 Thanks
    Comms69
    Unfortunately this sort of thing isn't taught in school.

    In conversations with my teenage kids about how tax/loans/credit cards etc works, they have said "why aren't we taught about this stuff, it would actually be helpful rather than all the rubbish we have to learn".
    Originally posted by RichardD1970


    I agree totally actually. I just thought this was actually taught, I know plenty of other things aren't. It's just shocking!
    • Detroit
    • By Detroit 4th Mar 18, 8:01 PM
    • 747 Posts
    • 2,332 Thanks
    Detroit
    Thanks for that Comms69...I've come here for advice, not judgment. I wasn't taught any of this at school or by my parents, but rather than do absolutely nothing about it like a lot of people, I'm doing what I can to catch up. I appreciate it might have seemed like a stupid question but still.

    Thank you to everyone who has helped me on this thread.
    Originally posted by sleepysocks
    All of us have something we know absolutely nothing about.

    There's some useful basic information on how tax works on www.gov.uk. do I need to pay tax? The site is good for general information on a number of those things they don't teach us in school but somehow we need to know! As is www.adviceguide.org.uk the citizens advice site.


    Put your hands up.
    • jobbingmusician
    • By jobbingmusician 4th Mar 18, 10:51 PM
    • 19,163 Posts
    • 19,646 Thanks
    jobbingmusician
    Thanks for that Comms69...I've come here for advice, not judgment. I wasn't taught any of this at school or by my parents, but rather than do absolutely nothing about it like a lot of people, I'm doing what I can to catch up. I appreciate it might have seemed like a stupid question but still.

    Thank you to everyone who has helped me on this thread.
    Originally posted by sleepysocks
    I would like to thank you for asking, and for being clear about the things you were confused about. It's threads like this one which are invaluable to the board. You will never know how many other people read your thread and learn from it - but I am sure there will be loads!
    I'm the Board Guide on the Matched Betting; Referrers and Jobseeking & Training boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there. Board guides are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.

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