Tax to repay - Child Benefit

[pork911]

Alex said:

JustAnotherLogin said:

What is the point then?

The point is, why should the amount of tax an individual pays depend upon intimate knowledge of another individual's finances?

define individual

[JustAnotherLogin]

Alex said:

JustAnotherLogin said:

What is the point then?

The point is, why should the amount of tax an individual pays depend upon intimate knowledge of another individual's finances?

Because your partner is not a completely separate individual for the purposes of tax. You can transfer money between spouses without any tax liability. That advantage for sharing of money comes with a responsibility to also share information.

And because that partner is someone who presumably you have been intimate with in other ways.

And as has been said already, if you object to sharing financial information with the person with who you are most intimate, the mother or father of your child, you could just agree to decline the money without sharing any information at all.

[wobert]

Eric Mc said:

wobert said:

Here's a question....

40% tax payer close to the £50k threshold but under it.

Has company car (with fuel included).

Tax coding already adjusted to reflect the BIK of the car and fuel.

Does this mean the individual is under or over the £50k threshold for receiving CB?

Said person's wife is a 20% tax payer.....

Benefits in Kind are not included in measuring the Child Benefit £50,000 - £60,000 thresholds.

Conversely, pension contributions made by the taxpayer CAN be used to bring the assessable amount down below the thresholds. For instance, an individual with a gross salary of £55,000 would lose half the Child Benefit.
If they made a lump sum contribution to a pension of £5,001 their assessable gross salary would drop to £49,999 and they would lose no child benefit - as well as getting Higher Rate tax relief on the contribution..

Thanks Eric.

So confirm if and individual earns £47k and has BIK value from the car plus fuel of £8k, totalling £55k, then the CB provision is based on the £47k based salary?

I ask as the tax calculator on the first page asks for BIK values....

[jagracer]

I hate to be dense about this but what is child benefit? Is it what used to be called family allowance which you got for every child you have up to age 18? We got a bill for £81 which they'd over paid us when my daughter turned 18 but there was no means testing for it although from memory it was a downward sliding scale if you had more than 2 children, this was late 80s to 2005.

[pilchardthecat]

wobert said:

Eric Mc said:

wobert said:

Here's a question....

40% tax payer close to the £50k threshold but under it.

Has company car (with fuel included).

Tax coding already adjusted to reflect the BIK of the car and fuel.

Does this mean the individual is under or over the £50k threshold for receiving CB?

Said person's wife is a 20% tax payer.....

Benefits in Kind are not included in measuring the Child Benefit £50,000 - £60,000 thresholds.

Conversely, pension contributions made by the taxpayer CAN be used to bring the assessable amount down below the thresholds. For instance, an individual with a gross salary of £55,000 would lose half the Child Benefit.
If they made a lump sum contribution to a pension of £5,001 their assessable gross salary would drop to £49,999 and they would lose no child benefit - as well as getting Higher Rate tax relief on the contribution..

Thanks Eric.

So confirm if and individual earns £47k and has BIK value from the car plus fuel of £8k, totalling £55k, then the CB provision is based on the £47k based salary?

I ask as the tax calculator on the first page asks for BIK values....

He's only correct if the lump sum pension contribution is made via salary sacrifice and an ER contribution

If you just take it out of gross pay (ie a "normal" pension contribution), it still counts. I suspect your BIK/car allowance does too.

[worsy]

jagracer said:

I hate to be dense about this but what is child benefit? Is it what used to be called family allowance which you got for every child you have up to age 18? We got a bill for £81 which they'd over paid us when my daughter turned 18 but there was no means testing for it although from memory it was a downward sliding scale if you had more than 2 children, this was late 80s to 2005.

Yes.

It is now means tested as discussed on this thread.

[Eric Mc]

pilchardthecat said:

He's only correct if the lump sum pension contribution is made via salary sacrifice and an ER contribution

If you just take it out of gross pay (ie a "normal" pension contribution), it still counts. I suspect your BIK/car allowance does too.

Car allowance is taxed just like salary so would be considered part of Gross Salary and would count towards the £50,000 total.

A normal Company Car BIK would NOT count.

I was talking about an PERSONAL pension contributions made directly by the taxpayer. Using a PERSONAL pension contribution payment is a legitimate planning device to get you below the £50,000 - £60,000 threshold.

[Eric Mc]

worsy said:

Yes.

It is now means tested as discussed on this thread.

As of December 2013.

[jagracer]

worsy said:

jagracer said:

I hate to be dense about this but what is child benefit? Is it what used to be called family allowance which you got for every child you have up to age 18? We got a bill for £81 which they'd over paid us when my daughter turned 18 but there was no means testing for it although from memory it was a downward sliding scale if you had more than 2 children, this was late 80s to 2005.

Yes.

It is now means tested as discussed on this thread.

Thanks for the reply.

[Scotty2]

Ooh I seem to have touched a nerve!

For clarity, as a not so powerfully built Director, My income does vary a bit. I knew if I hit £60k I would not qualify for CB. I had tried to keep my income lower but due to "stuff" I went slightly over. Just really miffs me when our household gets a hit like that while 2x£49999 incomes keep it all!

I have been advised to keep claiming it, put it to one side and pay it back IF I earn over £60 k next year because if I stop the claim, it would be very difficult to start it up again.

Still think a max of 2 kidsworth to all is fairer and may stop some Chavs popping out kids as a way to "earn" more. I wonder what's in the manifestos? I like Eric's advice on a pension payment.

And it was refreshing to see how well some of my taxes are spent on the feckless. That seems like a great job!

Taken from TV Thread:

Tattoos - Check
Unkept front garden- Despite being in there all fooking day - Check
Fags - Check
Booze - Check
Latest phones - Check
Many many offspring - Check
TV and Sky - Check
Moan about ENTITLEMENT - Check
Dog - Check
Expensive trainers - Check
"Father of the Year" (in ones own mind class) - Check

Right that completes my checklist of fecklessness - Where do I sign on to get this money (which isn't enough obviously).

Oh and I am prepared to work, well when it suits me. If I can be arsed.

Time for a "work for benefit" scheme methinks.

Edited by Scotty2 on Friday 23 January 16:25

[wobert]

Eric Mc said:

pilchardthecat said:

He's only correct if the lump sum pension contribution is made via salary sacrifice and an ER contribution

If you just take it out of gross pay (ie a "normal" pension contribution), it still counts. I suspect your BIK/car allowance does too.

Car allowance is taxed just like salary so would be considered part of Gross Salary and would count towards the £50,000 total.

A normal Company Car BIK would NOT count.

I was talking about an PERSONAL pension contributions made directly by the taxpayer. Using a PERSONAL pension contribution payment is a legitimate planning device to get you below the £50,000 - £60,000 threshold.

Ok the company car is exactly that, no allowance just a benefit in kind.

Due to the fuel element, my tax coding is pretty much obliterated by the BIK.

So confirm, provided my salary and bonus are below the £50k threshold then I am ok?

I don't make any personal pension contributions. The only pension payments made are via salary sacrifice prior to deductions.

Robert

[pork911]

Scotty2 said:

Ooh I seem to have touched a nerve!

For clarity, as a not so powerfully built Director, My income does vary a bit. I knew if I hit £60k I would not qualify for CB. I had tried to keep my income lower but due to "stuff" I went slightly over. Just really miffs me when our household gets a hit like that while 2x£49999 incomes keep it all!

I have been advised to keep claiming it, put it to one side and pay it back IF I earn over £60 k next year because if I stop the claim, it would be very difficult to start it up again.

Still think a max of 2 kidsworth to all is fairer and may stop some Chavs popping out kids as a way to "earn" more. I wonder what's in the manifestos? I like Eric's advice on a pension payment.

And it was refreshing to see how well some of my taxes are spent on the feckless. That seems like a great job!

Taken from TV Thread:

Tattoos - Check
Unkept front garden- Despite being in there all fooking day - Check
Fags - Check
Booze - Check
Latest phones - Check
Many many offspring - Check
TV and Sky - Check
Moan about ENTITLEMENT - Check
Dog - Check
Expensive trainers - Check
"Father of the Year" (in ones own mind class) - Check

Right that completes my checklist of fecklessness - Where do I sign on to get this money (which isn't enough obviously).

Oh and I am prepared to work, well when it suits me. If I can be arsed.

Time for a "work for benefit" scheme methinks.

Edited by Scotty2 on Friday 23 January 16:25

so to be clear, do you NEED the child benefit?

if yes, why did you have kids you can't afford?

if no, why are you scrounging?

[TwigtheWonderkid]

Simple rule of thumb re qualification for child benefit:

The more likely you are to spend it for the benefit your children, the less likely you are to qualify for it.

[Eric Mc]

wobert said:

So confirm, provided my salary and bonus are below the £50k threshold then I am ok?

Yes

[pork911]

Eric Mc said:

wobert said:

So confirm, provided my salary and bonus are below the £50k threshold then I am ok?

Yes

assuming you can live on that (together with CB)

[Mr E]

JustAnotherLogin said:

Because your partner is not a completely separate individual for the purposes of tax.

I am not married to person I live with and the mother of my child.
Our tax affairs are completely separate as far as I know.
I actually don't know what she earns (I of course have a rough idea). She could not put an exact figure on what I earn.

[Eric Mc]

JustAnotherLogin said:

Because your partner is not a completely separate individual for the purposes of tax. You can transfer money between spouses without any tax liability. That advantage for sharing of money comes with a responsibility to also share information.

And because that partner is someone who presumably you have been intimate with in other ways.

And as has been said already, if you object to sharing financial information with the person with who you are most intimate, the mother or father of your child, you could just agree to decline the money without sharing any information at all.

Up until 1988, a wife was still considered, in some respects, to be a "chattel" of her husband and her "investment income" i.e. income from savings, rents, dividends, interest etc (not her "earned" income) was considered to be her husbands and not hers.

In earlier times, ALL her income had been deemed to belong to the husband.

As a result, men were traditionally taxed on ALL the income coming into the household as if the income was all theirs.

Over the years, various campaigns (including an Irish couple taking the Irish government to the European Court) were fought in order to have married women taxed as if they were independent human beings - not mere possessions of their spouses.

I thought that this battle had finally been won in the UK in 1988/89 when true "Independent Taxation" finally was put on the statute books.

This additional taxing of people on their partner's Child Benefit is a retrograde step in my opinion. I wonder will any UK couple have the guts to try and bring a case to the European Court on this.

[JustAnotherLogin]

Like I said before. If you really don't know, HMRC will take it away from you as per the OP. So you have not been discriminated against vs anyone else. So why the complaints?

And if it is that important for the two of you not to know whether your partner earns more or less than the higher tax rate (a situation I find risible frankly), then as I said, you can agree to not claim the benefit, irrespective of what either of you earn.

So for that reason Eric, I think any challenge would fail

[airbus330]

Hi,
just wanted to confirm the Salary Sacrifice into Pension comments. I sucessfully SSed enough money to bring by p60 income below 50k. HMRC quite happy and figures agreed.

[pork911]

Mr E said:

JustAnotherLogin said:

Because your partner is not a completely separate individual for the purposes of tax.

I am not married to person I live with and the mother of my child.
Our tax affairs are completely separate as far as I know.
I actually don't know what she earns (I of course have a rough idea). She could not put an exact figure on what I earn.

that's fine but co-habitees who are also co-breeders aren't entirely separate when it comes to claiming child benefit