Child Benefit Tax Charge

[alangla]

Senex said:

Because I have only about one or two years of work left (my choice), I can leave anytime as I am past retirement age and my pension is pretty much sorted.

The strange thing is the late sixties are the best years to earn, I get paid a salary and also claim state pension and I don't pay National Insurance.

My wife gets Child Benefit because we are raising our granddaughter .

I might moan but I am very fortunate.

Are you not sorely tempted to either jack it all in or attempt to go part time?
Congratulations on becoming another part of HMRC’s piñata though!

[Senex]

alangla said:

Are you not sorely tempted to either jack it all in or attempt to go part time?
Congratulations on becoming another part of HMRC’s piñata though!

I am part time, I took advantage of the Civil Service partial retirement scheme, like I said I am very fortunate.

Obviously not long to go now, another year, maybe eighteen months tops.

[duckson]

This subject was brought up by Martin Lewis when he met the chancellor (Tuesday 9th Jan show on ITV).

Martin said it was by far the topic which garnered the most questions for this interview, we can only wait and see if something is changed (increase threshold at least!).

[LastPoster]

duckson said:

This subject was brought up by Martin Lewis when he met the chancellor (Tuesday 9th Jan show on ITV).

Martin said it was by far the topic which garnered the most questions for this interview, we can only wait and see if something is changed (increase threshold at least!).

If they do make a change, I'm sure it will be on or around 1st Sept. The point at which I will no longer be eligible having been hit by it every year since introduction

[Sheepshanks]

LastPoster said:

duckson said:

This subject was brought up by Martin Lewis when he met the chancellor (Tuesday 9th Jan show on ITV).

Martin said it was by far the topic which garnered the most questions for this interview, we can only wait and see if something is changed (increase threshold at least!).

If they do make a change, I'm sure it will be on or around 1st Sept. The point at which I will no longer be eligible having been hit by it every year since introduction

I didn't see the show itself, but a report I read about it said Martin Lewis wasn't at all hopeful it was going to be addressed.

Is there much general discussion of this issue? Perhaps I'm the wrong generation but even our friends aren't talking about it even though quite a few of their "kids" must affected. My daughter reckons it's quite a hot topic amongst her colleagues - if she worked full time it would affect her although her pension contributions would bring her back under. She's hit anyway due to her husbands salary.

[duckson]

Sheepshanks said:

LastPoster said:

duckson said:

This subject was brought up by Martin Lewis when he met the chancellor (Tuesday 9th Jan show on ITV).

Martin said it was by far the topic which garnered the most questions for this interview, we can only wait and see if something is changed (increase threshold at least!).

If they do make a change, I'm sure it will be on or around 1st Sept. The point at which I will no longer be eligible having been hit by it every year since introduction

I didn't see the show itself, but a report I read about it said Martin Lewis wasn't at all hopeful it was going to be addressed.

Is there much general discussion of this issue? Perhaps I'm the wrong generation but even our friends aren't talking about it even though quite a few of their "kids" must affected. My daughter reckons it's quite a hot topic amongst her colleagues - if she worked full time it would affect her although her pension contributions would bring her back under. She's hit anyway due to her husbands salary.

Martin said his gut reaction put it at a 40% chance of being changed.
It’s mentioned fairly often at my work and the fact it was by far the topic which had the most questions/gripes I’d say it was an issue which is gaining more and more spotlight especially that a lot of people would of been getting larger % salary increases than normal.

[Senex]

Sheepshanks said:

I didn't see the show itself, but a report I read about it said Martin Lewis wasn't at all hopeful it was going to be addressed.

Is there much general discussion of this issue? Perhaps I'm the wrong generation but even our friends aren't talking about it even though quite a few of their "kids" must affected. My daughter reckons it's quite a hot topic amongst her colleagues - if she worked full time it would affect her although her pension contributions would bring her back under. She's hit anyway due to her husbands salary.

Is there much general discussion of this issue?

Yes there is, very much so, but only among those people with kids. The tactic mostly used is to refuse any overtime to keep themselves under the limit. Not very good for the job but I'm sure George Osborne isn't losing any sleep over that.

Talking of people at work with kids, when I was a young man nearly everyone I worked with was married with two or three children. These days a married colleague with three children is pretty rare.

[Chris Type R]

Senex said:

Talking of people at work with kids, when I was a young man nearly everyone I worked with was married with two or three children. These days a married colleague with three children is pretty rare.

This probably has a lot to do with falling fertility rates.

[ChrisNic]

My 58% marginal rate for £50-60k is proving very effective at setting me up for a reasonable retirement.

If the policy changed i would find it difficult to maintain the discipline of putting everything over £50k into my pension. I doubt having more take home would make that much difference to my life anyway.

[LastPoster]

ChrisNic said:

My 58% marginal rate for £50-60k is proving very effective at setting me up for a reasonable retirement.

If the policy changed i would find it difficult to maintain the discipline of putting everything over £50k into my pension. I doubt having more take home would make that much difference to my life anyway.

Feel free to tell me it's none of my business but out of interest, do you have a good second income into the household? My issue with this bit of terrible policy is that the line is often "salary sacrifice so you don't lose it" but on as good as a single income I just couldn't afford to

The irony being that in an effort to save a benefit cost, the government have provided a great avenue for those that can afford to retain CB and pay lower tax overall.

Not a dig at you, a dig at the system

[Hondashark]

ChrisNic said:

My 58% marginal rate for £50-60k is proving very effective at setting me up for a reasonable retirement.

If the policy changed i would find it difficult to maintain the discipline of putting everything over £50k into my pension. I doubt having more take home would make that much difference to my life anyway.

Same, with 2 kids the tax is effectively 65% though. Means I'm currently putting about 30% into my pension.
Itll be even more if we sort out last years payrise before this April.

[Sheepshanks]

ChrisNic said:

My 58% marginal rate for £50-60k is proving very effective at setting me up for a reasonable retirement.

If the policy changed i would find it difficult to maintain the discipline of putting everything over £50k into my pension. I doubt having more take home would make that much difference to my life anyway.

I don't know if that's worth it for my "kids" - daughter is NHS and her husband is a teacher. I would say there's absolutely no chance of getting him to put more into his pension - we're constantly amazed that he hasn't dropped out of it.

[WhiskyDisco]

With 4 kids, I pay a marginal rate of 77% on earnings between 50k and 60k. £4,000 plus the charge below.

Quote:
The estimated tax charge to pay is £3,728.00.

This is an estimate based on your adjusted net income of £60,000.00 - your circumstances may change before the end of the tax year.

[Puzzles]

So WD goes from a 30% marginal rate to 77%.

I’ve said this so many times but they need to iron out these kinks in marginal rates.

[WhiskyDisco]

40% marginal to 77% (plus 2% NI so it's actually 79%)

[WhiskyDisco]

Basically I come home with £5,800 and then have to find £3,728 to pay back.

[Hub]

I think I will also fall into the CBTC trap this year. I already have some salary sacrifice, but with a recent pay rise taxable pay will still exceed the threshold by the end of the year. I also have messed up a bit with savings so I'll potentially be over the tax threshold on that too, particularly if I'm now deemed higher rate - I know that savings interest over £500 in affected accounts would be taxed, but if I'm over the savings allowance I presume that will also count as income which will increase the amount of child benefit needing to be paid back? (and all savings interest or just the taxable element counting as income for the purposes of the CBTC?)

Will have to sort myself out for next year!

I'm guessing it is best to wait for my P60 before doing the self assessment?

[Chris Type R]

Puzzles said:

So WD goes from a 30% marginal rate to 77%.

I’ve said this so many times but they need to iron out these kinks in marginal rates.

Any effort to do so will likely be shouted down as 'tax cuts for the wealthy'.

[Puzzles]

WhiskyDisco said:

40% marginal to 77% (plus 2% NI so it's actually 79%)

I was counting 20% + 10% NI in the basic rate band to your 77% rate (now 79% )

[Puzzles]

Chris Type R said:

Any effort to do so will likely be shouted down as 'tax cuts for the wealthy'.

yep the 'wealthy'

Edited by Puzzles on Monday 15th January 22:41