Child Tax Credits, income and household earnings
Discussion
Eric Mc said:
It was a crazy piece of legislation which the public failed to react correctly to. You get the government you deserve.
It didn't affect 95% of the voting population, that's why. They don't care if people earning more than them have to pay more tax.The problem, as is often the case with these 'round-number' thresholds is fiscal drag and over time more people will get dragged into this 'rich' zone. Only then will the noise start to rise about the unfairness of it.
The threshold of £50k was set in 2013, when today's £50k salary was on average only £46k.
Then there's the £100k threshold on losing the personal allowance. Set in 2009 but it hasn't moved since. If this moved with average wage growth then the threshold should be £118,000 now.
Some unbelievably miserable and unhelpful responses to a perfectly reasonable post. Go have a word with yourselves (EDIT: SOME of you, not all)
OP, you sound a lot like me. We've got young 'uns, and my wife went back to work a few months ago.
The first £24,000 of her take-home offsets the childcare costs we now incur (£1000/month for each nipper round these 'ere parts). That means she needs a salary of at least £32k before we earn a penny extra by having both of us working. Fortunately in her line of work she earns a little bit more than that, but still, she works 40 hours/week plus travel time, for a net gain to the household income of just a few hundred pounds per month.
Anecdotally, around the country childcare costs vary, but they seem to track local average pay, just like any supply/demand service, so while I know people who pay more or less for childcare, they earn more or less correspondingly, so the problem is the same.
I just cannot imagine how many families there are out there in similar situations to us where the Mrs doesn't earn £32k+ so CANNOT go back to work because they cannot make the sums add up, so when OP says the government has its sums BADLY wrong with the tax breaks on childcare, especially if, as it claims, it wants to get people back to work, then I whole-heatedly agree. I know people who simply would not be back to work without the help of grandparents. So those responders on their bloody high horses, and shouting "council" at OP, clearly haven't had any experience of this issue. This isn't a class thing, it's a political shambles.
OP, you sound a lot like me. We've got young 'uns, and my wife went back to work a few months ago.
The first £24,000 of her take-home offsets the childcare costs we now incur (£1000/month for each nipper round these 'ere parts). That means she needs a salary of at least £32k before we earn a penny extra by having both of us working. Fortunately in her line of work she earns a little bit more than that, but still, she works 40 hours/week plus travel time, for a net gain to the household income of just a few hundred pounds per month.
Anecdotally, around the country childcare costs vary, but they seem to track local average pay, just like any supply/demand service, so while I know people who pay more or less for childcare, they earn more or less correspondingly, so the problem is the same.
I just cannot imagine how many families there are out there in similar situations to us where the Mrs doesn't earn £32k+ so CANNOT go back to work because they cannot make the sums add up, so when OP says the government has its sums BADLY wrong with the tax breaks on childcare, especially if, as it claims, it wants to get people back to work, then I whole-heatedly agree. I know people who simply would not be back to work without the help of grandparents. So those responders on their bloody high horses, and shouting "council" at OP, clearly haven't had any experience of this issue. This isn't a class thing, it's a political shambles.
Edited by TartanPaint on Friday 21st April 09:52
One small point which I dont think has been mentioned so far. I think you could charge you brother in law rent as a lodger under the rent a room scheme and, up to certain thresholds, it is tax free and wouldn't affect your other entitlements. Worth bearing in mind so you dont HAVE to let him stay for free. Clearly you may want to but the first few years are tough and at the risk of sounding like a supermarket, every little helps!
Eric Mc said:
It was a crazy piece of legislation which the public failed to react correctly to. You get the government you deserve.
Utterly yet the public went along with it - however the pasty tax was somehow unfair and caused a huge uproar over simplifying tax instead it was to maintain competitive advantage via tax breaks to those companies who sold pasties... go figure. Personally for me it works really badly, the company car valued at £7.5k BIK puts me over the threshold for not getting any family allowance, so basically I actually nett a month about the same as someone who earns about £38k on a normal tax code.
Agreed I get a company car but that taxed to death too so hardly a perk nowadays.
Agreed I get a company car but that taxed to death too so hardly a perk nowadays.
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