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Child benefit - do I cancel it?

(39 Posts)
LonelyLinda Wed 16-Jan-13 13:28:51

Could anybody advise me what to do please. My DH is over the tax threshold and I vaguely remember seeing something on here about pros and cons of keeping it or cancelling it, but I cant remember why.

could anybody explain it to me please? Sorry for being so vague.

stargirl1701 Sat 19-Jan-13 18:36:57

We will stop claiming CB when we can combine our personal allowances. If we are a unit for benefits then we should be a unit for taxes.

you can apply for child benefit but opt out of the payment and still get the NI credits.

DorisIsWaiting Sat 19-Jan-13 17:29:43

I've just had a look and the home responsibilities proection (now national insurance credits) are still applied to those SAHP claiming child benefit up to the age of 12.

If you cancel CB I understand you would lose this credit (although with the most recent pension changes this may not be such a worry?)

LonelyLinda Sat 19-Jan-13 16:42:10

Thank you for the advice, I will opt out if I am still in time. If not I will save it so that it can be repaid later.

Thank you.

Toto110 Thu 17-Jan-13 17:47:42

I sympathise. It's rotten to have an unlevel playing field created in your own home which is out of your control. Particularly as you made the effort to get them started off well even with all the start-up costs of children coming upon you.
It's similar to child benefit where some better off families will continue to be eligible while other 'less well offs' are not.
It does make the case for getting State involvement out of mainstream society where individuals are better placed to make their own informed and fairer decisions, while it focuses on the minority cases. Then hopefully the majority can end up paying less tax into the centre.

Groovee Thu 17-Jan-13 17:18:11

I would have preferred to opt out of the trust funds as dd and ds had savings accounts set up for them as soon as they had their birth certificates. Now ds has something dd didn't have and put me in a situation I was never happy with.

Toto110 Thu 17-Jan-13 16:43:32

Ah, my mistake. Thank you. smile
On that point then, yours will also benefit and lose out from the double edged sword of tougher GSCEs with less course work; better for the children to be tested more rigorously, but tricky when it comes to the job market and competitive playing field they are up against. They can't really say they are a '2015 examinee' so their B should be considered an A. And they won't have the advantage of multiple past papers with which to revise.
Chopping and changing every five years just makes individuals fall between the cracks. I would prefer if the State were kept small and focused on projects that need people to come together to solve/finance such as road building, while staying out of other matters where individuals and families are better placed to decide for themselves.
It would be better to cut benefits, along with taxes (when there is some money around), and let people decide how to spend their own money, rather than all this tax and then redistribution to those you have already been taxed.
Instead of jostling for political advantage the parties should come together and decide on some 10 to 20 year plans and get rid of these vote winning carrots like child benefit and child trust funds (which I think have gone, although I haven't tracked it because not eligible). They just create the illusion that one is getting something back, but it is paltry compared to what has been put in by many.

ihategeorgeosborne Thu 17-Jan-13 16:15:06

Thanks Cogito. Will look into it. DH has pension contributions deducted at source from work, so there won't be any claim there for us. No company car or other benefits in kind either. Could well be onto something with charitable donations though.

I am a little hmm about the whole 'moral' dimension being tacked on to the question of cancelling CB - we are no longer entitled to retain the CB but I am continuing to claim, keeping the money in a separate account (the amount of interest is not life changing) then we will go through the tax self assess repayment route.

It makes no sense to me to stop claiming we are not so much over the 60k threshold and the threshold may change in future, dh could change jobs - when I return to work he may want to take a lower paid job closer to home. So retaining our claim is the option I am most comfortable with. In my opinion the CB payment is a recognition of the cost of raising a family (of future tax payers). I am also fed up with the line being trotted out by Gov spokespersons - 'why should a family earning 20k be paying for the CB of a family earning 80k?' as it seems to disregard the fact that a family on 80k is paying tax in excess of the lower paid families income - just another example of our Govt divide and conquer approach - really divisive and unpleasant. I don't mind so much losing the CB (although we are certainly not using it champagne and second cars) but I do resent misrepresentation.

CogitoErgoSometimes Thu 17-Jan-13 16:11:25

"why would he not be paying the right amount of tax now?"

I found that the main areas that could be wrong were pension contributions, charitable donations and the value of a company car (if applicable). If it's any help, I use a nifty bit of self assessment software called 'TaxCalc' which is about the best £25 I spend all year. Leads you through the whole SA process by the hand and lets you see whether they owe you or you owe them at the end. I always seem to end up being owed money.

AmandaPayne Thu 17-Jan-13 16:02:20

Not sure how far you can go back. Don't think it's as far as 10 years. Might be six though Not sure where I got that number from though.

ihategeorgeosborne Thu 17-Jan-13 16:01:21

Thanks. I think we need to see an accountant. DH has been paying to NSPCC for years AFAIK. We have never claimed back the tax relief. There must be about 10 years worth smile

AmandaPayne Thu 17-Jan-13 15:56:39

You definitely can claim back for charitable giving. At my old work a lot of the senior people had to do tax returns for various reasons and whenever there was a charity thingy HR used to send round an email reminding them to be generous and then claim back the extra bit! That was a while ago, but MrAnchovy on my other thread is an accountant and confirmed it still applies. No idea about proof of payment, etc you need though.

ihategeorgeosborne Thu 17-Jan-13 15:53:51

Thanks Amanda. There is no other income apart from work. He just has a straight forward P60 at the end of the tax year. He doesn't receive a P11D, so no benefits in kind to declare. Savings are in my name as I am SAHM with unused tax allowance. I would imagine we are pretty straight forward, though cannot see how he will get a tax rebate. He does a pay a bit to the NSPCC which he has never claimed relief for being on PAYE. May need to check this out. Perhaps we should pay the £100 or so and see an accountant. It's just difficult knowing who to speak to. It's a bit like doctors and mechanics - some are good and some are not so good. Does anyone know if you can back claim for charitable donations?

Groovee Thu 17-Jan-13 15:48:52

TOTO Child Trust Funds were introduced in March 2003 and backdated to September 2002 as ds was the only baby out of the 6 babies born that year in dh's family to get one. My dd was born in January 2000 and didn't get a trust fund as they weren't introduced until then.

AmandaPayne Thu 17-Jan-13 15:42:26

Unlikely he owes them money unless he has income from a source other than work I should have thought (though am no expert).

My thread was here. Things like gift aid sponsorship could add up quite fast - the charity claims back the basic rate tax and you can claim back the next chunk to take it to higher rate (assuming your charitable giving doesn't exceed the amount of higher rate earnings you have).

ihategeorgeosborne Thu 17-Jan-13 15:30:26

I like the sound of the tax rebate Amanda. We are in similar situation. DH is PAYE and will have to self assess for this. I don't understand though why he would get a tax rebate, as why would he not be paying the right amount of tax now? Also, (god forbid) what if it turns out that he owes them money?

AmandaPayne Thu 17-Jan-13 15:27:37

Oh, also bear in mind that, as I understand it, you have missed the deadline to stop it so will have to do a return this year anyway (think I have that right).

AmandaPayne Thu 17-Jan-13 15:26:41

I asked this question a while ago and all the advice was not to cancel. Ignoring any moral debate on keeping the interest (which personally I think is fine since it is a perfectly legal course of action) the reasons were generally:

- if your circumstances change such that you re-qualify, it is likely to be a pretty earth shattering event, like your DH losing his job, dying, or leaving. At a time where that money could be a lifeline, it would be good not to spend time waiting for your request to be processed;

- lack of faith that the home responsibilities bit (or whatever it is called) will be properly administered if you are not earning yourself;

- the fact that, as a person who has only ever done PAYE, my DH may well be owed a fair bit of money by the tax man, which doing a return will flush out. a poster who was an accountant reckons it is very rare for people not to find out that they are owed money well into three figures.

Toto110 Thu 17-Jan-13 15:20:37

Yes, part of the problem is the working tax credits. All this has done is to enable employers to keep their wage bills artificially low. Employers should pay living wages and working tax credits be done away with.

I cancelled my CB - both I and DH are over the threshold so no point receiving and then paying back. It saves admin for both HMRC, but more importantly for me too.

If you earn over £60k I would stop it, if you earn less I wouldn't.

ihategeorgeosborne Thu 17-Jan-13 15:06:40

I agree, benefits should only be for those that really need them. People in work should be paying less tax and being allowed to keep more of their own money. Employers should pay a living wage too. The situation we are in is totally unsustainable, but NO government dares do this as they know it is electoral oblivion. They missed an opportunity with the child benefit changes. They could easily have made the cuts fairer by merging into tax credits. Instead they went for the more complex, very unfair, but doesn't affect many people (so our voting base should hold up) option. I guarantee they will regret this when it becomes clear that clawing back the money is not as straight forward as they'd hoped and also when they lose the election in 2015 it should sink in slowly that it may have been a mistake. Who knows? hmm

CogitoErgoSometimes Thu 17-Jan-13 15:04:18

Whether to keep claiming CB when one partner earns more than £50k has very little to do with benefits any more. It's a taxable income issue. So the advice stands for anyone in the £50k-£60k bracket... keep claiming, file a self-assessment and, if necessary, pay some or all of it back. With the added bonus that they might get a tax rebate at the same time.

Toto110 Thu 17-Jan-13 14:56:19

well I was brought up to believe that saying thanks makes all the difference and I avoid situations where I can't, that's all. I agree with 'ihategeorgeosbornes' comment that the removal of the benefit over a threshhold is unfair, just like the child trust funds that were introduced in 2000 and we missed by one year (my son being a 1999 baby).
What I find more worrying is that the Institute for Fiscal Studies says 7 million out of 14.1m working families will se a reduction in their benefits with the proposed freeze on increases to 1% (less than inflation).
How on earth can half the working families in Britain be on benefits? How did we get in this situation. It is not financially viable.
It is just an idea, and not really thought through, but perhaps the Govt could do away with all benefits and then focus the help on the poorest 5 or 10%, including those with debilitating conditions and vulnerable elderly etc. I would really like to see much more help channelled to these people.

CogitoErgoSometimes Thu 17-Jan-13 14:46:48

"I think I have it harder "

Because no-one comes knocking on your door to say thanks? hmm Gee, life must be one big disappointment to you....

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