So child benefit to go for higher rate taxpayers

(1017 Posts)
foxinsocks Mon 04-Oct-10 07:22:32

So says George osbourne on breakfast telly. Missed the details but sounds like it comes in from 2013!

MaryBS Tue 05-Oct-10 11:29:41

Also too late for me. Perhaps I can use the quote when I get fobbed off a reply

LilRedWG Tue 05-Oct-10 11:33:23

Excellent letter rantyknickers - used here too. Thanks.

Luciemule, that's our situation too. DH is a couple of grand above the tax bracket and therefore pays higher rate of tax. I am a SAHM and Child Benefit was the only money I was paid for doing what I think is a pretty important job. Obviously there are going to be people who foam at the mouth at that - it was my choice to have children and my choice to stay at home with them. However. DH's income is all we will have for forseeable future. I am due DC2 in december, so come 2013, I will be £1608 worse off. angry

But there are two years for this to be fine-tuned. Given the mass media hysteria about this (incl the Torygraph!), can we be reasonably secure in thinking that they will rejig it and at least make it fairer to implement? I am most cross at the idea that two earners getting £40K a year will keep their benefit, whereas someone just over the tax bracket and the only earner, will lose it.

foxinsocks Tue 05-Oct-10 11:57:24

should also point out a fact that dawned on me this morning

child benefit was one of those benefits that wasn't taxable

so therefore, the amount you got (if you were working and paying tax), went straight into your pocket. If you were a SAHM, this fact probably didn't matter as it would have come in under a tax free allowance even if it was taxable.

so if you are a single working parent paying 40% tax, getting £2,000 child benefit a year and then lose it, effectively, it is almost like losing £3,333 worth of your gross income. So if you were earning £45,000, that $3,333 is 7.5% of your gross earnings! A hell of a payrise to ask for if you were using CB to balance your books!

going Tue 05-Oct-10 12:02:33

ANTagony I think it doesn't apply to HTR.

LeninGrad Tue 05-Oct-10 12:03:47

Yes, FIS, another way to look at it is that it's a 5% tax hike for some.

abouteve Tue 05-Oct-10 12:03:49

It's really strange and sad to see middle income families talking about splitting up, working less hours etc to make the most of the system, not that I think this will happen much.

That's how life has been all the way through for me and many others bringing up children alone or on low incomes. Toss up between working more hours for £10 a week/more time at home. Staying single to protect a minimum level of income/taking a chance on a partner who might not want to share. It's called the benefit trap and the more people are out of it the better.

Does anyone know what they are proposing re Uni tuition fees?

LeninGrad Tue 05-Oct-10 12:04:17

We will now be taxing SAHMs. Madness.

nikija Tue 05-Oct-10 12:08:36

Not only are child benefits going to be cut if someone earns more than £45k - which is next to nothing when you live in London and only one person works.

But I discovered today that we don't get any more child tax credit despite my partner losing his job last week. I bring home £1200 and our rent is £1500 (standard rental in London by the way). We've tried to find cheaper place but we need space for three of us plus a second child on the way. And it wouldn't be much cheaper than £1200.

I'm sick of being penalised as a working (and now partly unemployed) family. So evidently our household income has to be less than £16k to get any more child tax credit. So they are driving families to not work and end up on benefit.

I'm sick of struggling and want to demonstrate outside Parliament.

scaryteacher Tue 05-Oct-10 12:11:34

'How when it's unfair to ask low rate tax payers to pay Child Benefit for high rate payers' but they are not asked to do so. The tax my higher rate dh pays more than covers the cb for our one child; higher rate taxpayers pay tax, that's why they are higher rate!

I am more cross about the loss of HRP for non working Mums and the regressive tax move, effectively ending independent taxation, than I am about losing cb. HMRC should not be able to link my tax affairs with those of my husband given that they have nothing but two ITRs sent to different Tax Offices to go on. It's the double whammy -give up cb or pay tax on it, and then pay voluntary NICs to keep your contributions for your pension in place.

Lottiegal Tue 05-Oct-10 12:14:22

I think all these women should demonstrate, lets set up a group on the campaigns page

sweetkitty Tue 05-Oct-10 12:19:50

I have just worked out that we will be losing £3146 a year tax free so I don't know the figures but how much more will DP have to earn for us to break even.

Oh but wait a minute he will get an extra £150 a year tax break!

But apparently we are loaded and we don't need CB anyway hmm

DP has worked his bollocks off, had career development loans and paid them off to get a decent job and now we are being penalised for it.

With 4DC we would be better off signing on then at least the DC would see their father all the time instead of him out working to provide for them.

jen333 Tue 05-Oct-10 12:21:44

My partner generally earns just over the threashold (runs a small business). We are not married and do not have a joint bank account - the child benefit is the only money I actually receive.

I have enabled a number of my friends to return to work as I often collect their children from school. I calculate that they will have a family income far greater than ours and will still be receiving child benefit but I will not.

So many of the governments cuts seem to be aimed at children - schools rebuilding projects, child services, child benefit, university fees. Are children an easy option?

cal123 Tue 05-Oct-10 12:22:16

Hi All

My husband is a so called high earner and works abroad most of the time leaving me to look after our two kids and work part time.

We have discussed this situation and decided if this does all go through that we have had enough of paying all our taxes and getting nothing back out the system. So we are going to get what we are calling a paper divorce..sod this!..we are financally better off being divorce and although we still love each other purely on money terms this is a ridiculous situation.

So much for keeping families together and mending broken Britain!!...Thought this lot would be different but No!...they look after themselves as usual..and we..middle Britain that works hard and pays the most taxes get nothing back.

Marriage and family means nothing anymore..thats where Britain has gone wrong...so if you can't beat them you may as well join them....why should my children lose out they cost just as much as the next persons to bring up!!!

sorry for the rant....but this has made my blood boil....Thanks Mr Cameron...may as well have just kept Labour in!!!

nikija Tue 05-Oct-10 12:22:50

Yes I'm up for campaigning against this. I think mums should join together and demonstrate - let's take our kids with us AND our bank statements so they can see how hard it is to get by and we're pretty darn close to joining the ranks of the low paid underclass.

Hammy02 Tue 05-Oct-10 12:22:58

ArcticRoll Tue 05-Oct-10 10:15:01
It would be fairer and cheaper to administer to just raise taxes for all higher rate taxpayers.

Hang on, what about people that are in the higher tax bracket that don't have children? They are already paying more into the system than they are taking out as they are not using the education system/NHS anything like as much as someone with kids.

fijamez Tue 05-Oct-10 12:24:14

As a single parent who is also fortunate enough to be a higher rate tax payer, I am reconciled to the concept that tax rises (which this is) are inevitable in an effort to reduce the deficit.

I fail to see, however, how taking child benefit from someone like myself earning £45k as the sole earner (with no support at home and therefore required to pay full time childcare costs of £845 pm) or more while enabling a dual income household to receive child benefit while earning upto £87k pa can be described as fair.

I am not arguing for the retention of benefits for myself and other higher rate tax payers simply that all households on the same income be treated equally.

We are "all in this together" and this current proposal is manifestedly unfair and intellectually lazy. If the other universal benefit of winter fuel allowances escapes reform the moral cowardice in the face of political expediency will be complete.

poopedmum Tue 05-Oct-10 12:26:10

angry I am becoming more and more angry with Tory politicians referring to this withdrawal of child benefits as FAIR. When questioned about it they merely point out that assessing dual-income families that earn over the threshold would be too difficult and intrusive! That is NOT an answer to the question. IT does NOT alter the fact that it is UNFAIR. As a parent of 4 children my husband will have to earn £5000 more per anum (pre-tax) to make up for what we will lose. For those just over the threshold, this is a HUGE contribution to make, in contrast to those dual income families who may bring in nearly double the household income. The Tories promising to look at the transferal of part of a spouses tax-free allowance is not the answer either! That is something that they should be addressing anyway....regardless of child benefit issues!
I do hope that the Tories have the courage to go back on this awful decision!

LyingMachiavellianTrollop1 Tue 05-Oct-10 12:27:16

The whole point of a universal non means tested benefit is to do precisely what David Cameron says he wants to do which is to remind the people of this country that we are "All in it together" so that the rich feel that they have a stake in the country and cannot disengage by saying "Well this country does nothing for me" and then refusing to pay tax in this country etc. Universal benefits mean that no-one can opt out Like the old lady interviewed during the election who said she wasn’t worried about benefits cuts as she had never received any benefits and the interviewer asked her if she didn’t have a free bus pass or get the winter fuel allowance or a free TV licence or an old age pension. She looked puzzled and said “Oh I never thought of those as benefits”.

I don’t want any universal benefits to be removed as they are part of the fabric of society which we are still only just stitching back together after the 80’s and 90’s Tory experiment of the cult of the individual, looking after number one. I met a bloke who lives in a £20,000,000 property in central London, He commutes to Europe everyday (Yes he’s a banker) and he pays tax in Switzerland at a much lower rate than here. “Why should I pay tax in this country?” he asked. I replied “Because it pays for the society you choose to live in and means that you don’t get strung up from the nearest lamp post by a rampaging mob of desperate people.”

If we are “in it together” why don’t they put up they introduce a temporary top rate of tax for those earning more than £150,000 or just tax banker’s bonuses at 99%? It might not raise that much, only a mere £7 billion this year, compared to the £1 billion they are going to squeeze out of us, but we would all feel that justice was being seen to be done. But, no. DC and George Osborne are using the financial situation as an excuse for ideological purposes. They feel like unreconstructed Tory Boys to me. They think they can do this to us because we aren't their core constituency, plus we have got more pressing things on our minds (like kids) and why aren’t they removing the universal benefits of pensioners? Well because the Tory party membership is still on average around 65 so they don’t want to upset their voters and activists, and as pensioners of course they would have more time to get active around this.

So what are we going to DO about it? We are very good at getting outraged and I have certainly been enjoying the comments on this issue, but I fear we run the risk of dissipating our anger. We need to organise some sort of action quickly before they think they can just get away with it. Yes of course we must write to our MPs. (Though mine is Joan Ruddock and I think it will be preaching to the converted.) and thank you Rantyknickers for your fabulous template, but what else? How do we have an impact on these Bullingdon Bullies who have never known the need for such a thing as CB.

I’m so cross I can’t think creatively at the moment.

Lottiegal Tue 05-Oct-10 12:27:23

I am very suspicious of GO. Not only did he promise not to ax the holy CB and now is doing so it makes me wonder why he is risking such a contraversial move for relatively little gain. I billion in the economy is relatively little on the grand scale, the govt need to make a saving of about 10billion. Pundits on the tv and uncertain tory backbenchers are hinting that it's the first of a series of such cuts, 1 billion here, 1 billion there etc hitting various parts of society. I don't know whether he's chosen the worst one first, in order to soften the blow for future cuts? Just suspicious of what else he's planning (shock) Either way I think the huge response has been a surprise to them, most people like me on this middle income and staying at home are not just going to say 'oh well I guess I can afford it'. I buy all my clothes and shoes for me and kids from charity/ebay, most of the toys too, I have worked hard for 10 years and am only taking off 3/4 years to raise my toddlers before they start school. We don't have foreign holiday, make savings or have many days out. We share one 10 year old car, and my husband is a civil servant who is on a two year pay and recruitment freeze. DC don't tell me 'we are in this together' You have no idea what my life is like! Isn't it true that 80% of the inner circle of the tory party are millionaires? how would they have a clue?

purplehippopotamus Tue 05-Oct-10 12:32:59

I'm quite new here, but wanted to give a perspective on this. My husband and I don't have any children yet, but hope to start a family in the next couple of years. We are waiting until our financial situation is right and do not expect to be supported by the state to bring up the children we choose to have. We both work full time, and I earn just over the higher rate tax threshold so we will not qualify for child benefit under this new proposal. We are far from well off, as we live in the expensive south east, are still paying off student debts and have a large mortgage just to afford our 2 bedroom house, but again, these are our decisions. I accept that money will be very tight when we have children, but we are still much better off than couples or individuals who earn less than we do and everyone in society needs to make their contribution to ensure that the economy recovers.

AliceL Tue 05-Oct-10 12:35:40

You would expect the Chancellor to be able to use a calculator at least! £1 over the threshold = loose £000's - what is the marginal tax rate on that???

Clearly it should be tapered BUT that also depends on the number of children you have so unless you taper it over say 20*52/0.4 = 2600 of income (similar for more children but @£13.10) for first child etc then you end up paying a marginal tax rate of more than 40%!

Cameron has justified this as being fair because it is simple - but it fails even that test and looks like a complete mess rushed out for a Tory conference announcement. Or could it be that no one who was in the know on this beforehand actually has the first idea about how CB works or what it is like to live and pay housing and childcare even on £45k per year. They don't as they are all (Clegg included) millionaires and with very wealthy and highly paid wives (good on them at least they won;t loose out through this).

They still have not answered the question - why not just put up the main tax rate - less than 1% on the higher rate would raise much more - but that would be spread evenly rather than just target families? SO the quote on being family friendly looks even worse. After all CB does not cover the full cost of a child so anyone with children will be worse off on the same salalry as anyone without but they are being targetted with all the changes they have already made (frozen CB, cut health in pregnancy grant, reduction in child tax credit threshold).

AND just remember, this does not come in until 2013 (why if it is so urgent to reduce the deficit?) but they had also announced that the 40% threshold is frozen for the next two years so even if it does not hit you now don;t accept any pay rises as you may end up worse off - truely bizzare!

Lottiegal Tue 05-Oct-10 12:38:28

LyingMachiavellianTrollop1, I loved all your comments, you touched on everything I discussed with my husband about last night. I feel the only way is to demonstrate, but I'm not sure if working mums are willing to jeopardise their jobs by taking time off to do so? I agree I expect the tory bullys would be slightly shocked that we women are standing up for our rights, and the media would definitely be interested. Setting up a Facebook group to see how many people are interested could be a good starting point if it hasn't already been done.

sweetkitty Tue 05-Oct-10 12:41:57

Surely a 1p income tax increase across the board would be easier to administer and be fairer as everyone will pay it, than taking bits away here, there and everywhere.

But then Tories don't raise taxes do they hmm they just raise NI, reduce disability benefits, freeze pay rises, take away child tax credits and child benefit, raise VAT?

StableButDeluded Tue 05-Oct-10 12:42:11

Have just attempted to catch up with most of the thread-I'm rather late coming to it I'm afraid, but I'm so cross about this-and it doesn't even affect me personally since we don't earn enough. I agree totally with the points Rantyknickers makes in her letter and I am going to send it to my own MP.

What can we do? What if each of us uses the same letter (if Rantyknickers agrees) to send, or use it as the basis for an organised petition, or something? I really want to do something but just don't know what!

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