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Abolish High Income Child Benefit Charge....

(104 Posts)
Mewli Tue 21-Feb-17 22:48:19

Because it is an ill thought of tax. Any tax that is signed into law must at least be broadly fair. If the Government could not be asked to design a law appropriately then they shouldn't collect this tax. The HMRC taxes those families with a single person earning £50,000 and above, but leaves families with couples earning £49,999 each . I feel this tax was allowed to pass because it was just easier to convince the electorate that these "rich people"(earning £50,000 and above should pay more ) instead of designing an appropriate tax. angry

PickleSarnie Tue 21-Feb-17 22:52:42

I'm confused. It's not a tax. HMRC makes you pay it back (either some or all of it depending on income) if you choose to claim it. You can choose not to claim it though.

Are you suggesting that they should go back to giving it to everyone regardless of income?

CurlyWurlyCatcher Tue 21-Feb-17 22:57:55

I believe that there should be a cut off, however I'm with you OP. DP earns £54,000 a year once you factor in his company car. I'm currently a SAHM so DP's income is our only income. However, close friends of ours both work and earn £87,000 combined - they still claim their child benefit despite being far more comfortable than us.
We were caught out this year as we had misunderstood about the company car being included, so we now owe just over £1000 to HMRC. Our own fault, but frustrating nonetheless.

OverOn Tue 21-Feb-17 23:01:43

It's highly unfair in the way it's designed to favour couples over single people.

It should be based on household income but would cost more to administer. So this unfair way it is then.

manicinsomniac Tue 21-Feb-17 23:09:24

Is this the same as child benefit?

I agree it's unfair that couples with a combined income off 99K get it - but I would cut it for them, not reinstate it for single people over 50K.

I'm a single mum and earn nearly 10K under the 50K limit - and I would say I don't need my child benefit. It's nice to have but it's going into savings for the children - hardly the same kind of need as putting food on the table.

Personally, I'd cut it for households with an income over 30K and increase it for households with an income under 20K - leaving those in the middle at the same rate.

SmilingButClueless Tue 21-Feb-17 23:16:11

I agree with the principle but it should be based on household income not individual income. Other benefits seem to be able to be allocated based on household income, so I don't understand why a different mechanism is needed for this.

EmeraldScorn Tue 21-Feb-17 23:24:25

It's not a tax, you have the option of not claiming it!

The reality is that the entire system is being abused by all walks of life and to be blunt the very fact that anyone earning that type of money (individually or jointly) claims child benefit leaves a terrible taste in my mouth.

If you don't need it, don't take it!

InfiniteSheldon Wed 22-Feb-17 10:14:53

Shameful of those couples earning up £99,000 between them they should have more morals than that. It's very hard to administer on household income so a bit of self policing here would stop this. Yabu to resent the policy yanbu to resent the unfairness but start blaming those who don't need it for taking it. I think it should be abolished altogether those most in need don't get it (it's deducted from benefits). If we went back to the old system whereby anyone with dependent children got a larger personal allowance it would simplify things and reduce benefit dependency.

livingthegoodlife Wed 22-Feb-17 10:26:57

My husband is on the cusp of earning too much to allow me to claim child benefit (I'm sahm). It actually wouldn't be worth the pay rise to lose it.

I rely on that child benefit to buy stuff for our kids and house. After mortgage/bills/car/insurance etc we have almost no income left. This month's child benefit has paid for a plumber to mend leaking pipe and repair broken tumble drier. We have a lodger and that money has paid for swimming lessons for kids.

We need that money and have come to rely on it.

I wouldn't say an income of £50k was great to support our family of 3 kids and occasionally 2 teenagers.

livingthegoodlife Wed 22-Feb-17 10:29:45

I'm amazed people can save the money for kids bank accounts.

If you don't need it manicinsomniac then maybe you shouldn't claim it? (You are of course entitled to it but it's not fair to suggest cutting it just because of your personal circumstances)

Chasingsquirrels Wed 22-Feb-17 10:31:45

@livingthegoodlife at the 'on the cusp' point it is worth investigating putting the extra over £50k into a pension - the limit is taxable income which is after deducting pension contributions. So his net tax home & CB receipts would stay the same - and the extra goes towards boosting his pension.

BarbaraofSeville Wed 22-Feb-17 10:35:38

The single earner/dual earner thing isn't fair and I think also if you have 3 DCs or more and earn £60k, you are actually hardly any better off than if you earn £50k, because you lose around £2400+ in CB and are taxed at 40%+ NI on that portion of your wages.

There is a lot of misunderstanding though - lots of people seem to think you lose it all once you earn above £50k, but the loss is actually tapered between £50 and £60k although there are complications around other benefits like company cars and the effects of the marriage tax allowance and pensions.

I think it might be fairer if they scrapped universal CB altogether and incorporated it into child tax credits so lower earners got more and it tapered off as people earn more?

livingthegoodlife Wed 22-Feb-17 10:37:36

Thanks chasing - he will do this and actually mentioned this the other day!

Barbara - you are right. That is us! 3 kids etc.

harderandharder2breathe Wed 22-Feb-17 10:49:14

It's not fair that couples can have higher combined income but I think it should be scrapped for household income above £50k not reinstated for single incomes up to £100k

Cheby Wed 22-Feb-17 10:56:24

YANBU. It's unfairly applied. I earn over £50k after deductions, and pay back a portion of CB. It is a massive ball ache to do if nothing else, but because I am in the zone where you pay back a percentage of it rather than all of it, it is worth doing.

My DH earns much less than me so our combined earnings are much less than £99k.

I wouldn't mind if it was restricted further, to combined household income of over £50k, but it does royally piss me off that couples with exactly the same earnings as us but split differently between them can claim whereas we have to pay back. At my next increment rise I will stop claiming altogether as I will have to pay it all back. But we will still be earning significantly less than £99k between us.

FourForYouGlenCoco Wed 22-Feb-17 10:59:43

Slightly off topic, but can someone explain how it actually works? This is the first year DH earnings are likely to be between the 50-60k, I'm a SAHM and claim CB for our 2 kids. I mostly claim because of it counting towards pension contributions (unless I've got that wrong?) but really don't want to get caught out owing loads back. I know DH will have to fill in a tax return - we looked it up online and it said he'd have to do that next April (so 2018) but that seems wrong? Or am I just completely misunderstanding everything and being thick? V hard to find any comprehensive info on the gov. uk site without actually going through the process, so if anyone could explain or point me in the right direction I'd be grateful!

fairweathercyclist Wed 22-Feb-17 11:00:28

I'm like you Cheby, I earn enough to have to pay some of it back and earn more than DH does. However, this year I might stop because the hassle of having to fill in a tax return isn't worth the £10 or so a month I am actually entitled to. That said, I think you stop getting it when your dc is 16, so I might hold on until I stop getting it anyway as ds is 15 this year.

BarbaraofSeville Wed 22-Feb-17 11:02:17

It's also unfair when two people earning £30k still get all the CB and their household income will be higher than a single earner on £60k because there are two tax allowances plus they pay 20% tax, whereas the £60k earner pays up to 40% tax and there is only one tax allowance.

Chasingsquirrels Wed 22-Feb-17 11:58:48

@FourForYouGlenCoco
Tax year 16/17 - runs 6 Apr 16 to 5 Apr 17.
Earn over £50k and have claimed child benefit = fill in a tax return for the year after 5 April 17, filing deadline 31 Jan 18. Tax payable by 31 Jan 18.
Child benefit high income charge applied - clawing back CB at £1 for every £2 earned over £50k upto £60k. Above £60k 100% CB clawed back.

Chasingsquirrels Wed 22-Feb-17 11:59:49

When I say "earned" I mean taxable income.

AwaywiththePixies27 Wed 22-Feb-17 12:07:09

It's not a tax, you have the option of not claiming it!

^ reality is that the entire system is being abused by all walks of life and to be blunt the very fact that anyone earning that type of money (individually or jointly) claims child benefit leaves a terrible taste in my mouth.^

If you don't need it, don't take it!

Everything Emerald said.

A tax my arse <rolls eyes>

AwaywiththePixies27 Wed 22-Feb-17 12:10:03

Sorry my quote marks failed. You aren't being unreasonably when you see how unfairly it is applied. You are for thinking it's a tax however.

Flashinthepan Wed 22-Feb-17 12:11:22

Fourforyou as I understand it, so as not to penalise SAHPs re pensions/national insurance, if your OH earns over 60k, you can fill out a form registering for Child Benefit, but not actually claim it. You don't get the money, but you are still 'visible' in the system.

MrsWhiteWash Wed 22-Feb-17 12:13:56

I mostly claim because of it counting towards pension contributions (unless I've got that wrong?)

There was some media interest in this few weeks back - if you never claim because your over threshold then you don't get NI paid - but I think if you claim and then go over your in the system so it will be paid.

Few more pay rises and DH will be near 50 K - at that point I think increasing his pension contributions may be a better option for us.

fatmummy87 Wed 22-Feb-17 12:14:23

I agree it's ridiculous that it applies to families with a single earner of £50k. My husband and I earn approx £70k jointly and are entitled to the whole amount.

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