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To be pissed off at the new tax free childcare

(975 Posts)
childcarechallenge Tue 14-Feb-17 10:58:28

NC for this.

We have two DC in childcare and live in London. I'm starting a new job next month and my salary is 48K, after tax, student loan, childcare costs and tube to work plus a few other generally working expenses (clothes etc) I've worked out that I will take home less than £200 a month.

DH earns a good salary which is good because we almost completely rely on his salary for rent, bills etc. He just received a large bonus which pushes him over 100K which is the new limit for the new tax free childcare scheme from the government.

Essentially, between 100K and 120K after tax, student loan, the loss of his "tax free allowance" which is clawed back over 100K, and the fact that we will not be able to claim £4000 back on our childcare because he is no longer under 100K (This applies to BOTH of us because of his salary) means that of that £20K we are actually only £1800 better off. AIBU to think that this is complete robbery - DH works extremely hard, very long hours (sometimes 70 hour weeks) in a high stress environment and the government seem to take an obscene amount of his salary.

We have an opportunity coming up to move to a lower tax country in a year or so with his job and this just makes me really want to take it, AIBU?

AnneLovesGilbert Tue 14-Feb-17 11:00:47

YANBU to move, no. If you feel badly off on over £148k I'm not sure what to say to you.

BillSykesDog Tue 14-Feb-17 11:00:52

My heart is bleeding for you.

strawberrypenguin Tue 14-Feb-17 11:02:01

We all work hard. £148k salary between you is an awful lot more than most people have

Sixisthemagicnumber Tue 14-Feb-17 11:04:15

Can you not join the current childcare voucher scheme / the earnings Limits are More generous than the new tax Free Scheme.

Onthecouchagain Tue 14-Feb-17 11:05:27

Bloody hell, get a grip.

Poosnu Tue 14-Feb-17 11:05:34

Agree with PP - both of you should join the current childcare voucher scheme before it closes. It will help a little.

PineapplePunch Tue 14-Feb-17 11:05:50

148k you need to pay your own childcare or manage your finances better.

DontTouchTheMoustache Tue 14-Feb-17 11:06:32

biscuit I am a single parent earning substantially less than either of you. After childcare, rent, bills and groceries I'm left with about a fiver. I'm sure you will scrape by.

clickclickclick Tue 14-Feb-17 11:06:32

Oh dear.

gleam Tue 14-Feb-17 11:06:33

YABU to take the full childcare costs out of your salary calculation. It's a joint expense.
And childcare costs don't last forever. At least you'll still have a career.

childcarechallenge Tue 14-Feb-17 11:06:39

Just to clarify I'm not saying that I feel poor. Just annoyed that DH paid essentially a 91% tax on a bonus.

NauticalDisaster Tue 14-Feb-17 11:06:47

YANBU to consider a move, yabu to complain about being high earners.

childcarechallenge Tue 14-Feb-17 11:08:27

gleam The reason for doing that is that I considered not going back to work. I'm actually moving jobs at the end of mat leave because my old job didn't pay enough to cover childcare. So the alternative would be for me to not work and therefore not earn.

random79 Tue 14-Feb-17 11:09:53

I believe it only counts if his taxable income is > £100k. So if he increases his pension contributions (up to £40k/year) then he will be below the £100k threshold.

That said, I think most people don't realise that above £100k, besides all of the allowances being curtailed (worth less per year than you would initially think in consolation) you are effectively paying 60% tax on. So a £20k bonus would give you £8k in actual cash.

It's a bit ridiculous that the tax rate is actually higher for every additional £ if you earn £100k than it is if you earn £150k, but that's what it is.

DontTouchTheMoustache Tue 14-Feb-17 11:10:19

hmm many people on here are barely making ends meet so you won't get much sympathy. Pay for the childcare and get a grip.

Pointeshoes Tue 14-Feb-17 11:10:22

I'm speechless!

noeuf Tue 14-Feb-17 11:12:53

Hi op.
The tax system is a bit crap. Dh sometimes gets a bonus and loses loads in tax and NI.
So really, on paper, salaries can sound huge but boil down to something less exciting.

Flabrador Tue 14-Feb-17 11:13:22

I wouldn't expect much sympathy here OP, people seem to forget that just because other people are worse off doesn't make your own problems any less valid to your own life!

Is his bonus the same every year? Could he ask for a lower one to take you back under 100K? Would you be better off in the long run if he declined to take a bonus?

A friend of mine recently had to turn down a promotion that would have been really beneficial to his career because it would have pushed him over the higher tax threshold and they just can't afford to take that hit. It's sad really!

bloodyteenagers Tue 14-Feb-17 11:14:18

I never understand when a couple say after I pay childcare I'm left with £200 or whatever a month. Childcare is a household bill and should be treated as such.

MrsJayy Tue 14-Feb-17 11:14:25

You are moaning about tax on a huge bonus that is how high earning works there is families on their knees and you are a household of nearly 150k good for you

nannynick Tue 14-Feb-17 11:14:32

Is DH paying into a pension? If he paid the bonus in to that then taxable income for the year would be below £100k.

Sixisthemagicnumber Tue 14-Feb-17 11:15:07

Why are you viewing childcare as just your expense? Why is it being paid solely from your income?
I have already suggested joining the current voucher scheme but I am losing sympathy as your posts are a bit woe is me when you actually have a fantastic joint income.
The childcare costs are the result of having children, not the result of you having a great income.

Chloe84 Tue 14-Feb-17 11:15:16

I think people are being unnecessarily harsh to OP. MN isn't just for financially struggling parents. I can't help as I don't earn that OP, but hopefully someone else can.

I do think you seem to minimise your contribution to household expenses, OP.

You don't bring in 'only' £200pm and childcare is a shared cost.

Do you not have joint accounts?

BarbaraofSeville Tue 14-Feb-17 11:15:31

Well the 9% of his bonus he has left is 9% more than any bonus I and many other people have ever had.

He could always get a lower paying job if the pay and conditions don't suit.

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