AIBU to think the £100k tax trap is unfair?

But the cost of child care has never been so high. My 16 year olds nursery has more than doubled (was £27 a day is now £64). Where as national average wages have gone up by about a third in the same time frame. And this is relatively cheap for many areas.

Interesting - do you think schools and healthcare should be means tested too? As millionaires can currently get those free. To me, childcare is closer to those things than say universal credit.

The low paid parent (which is often the mother) already loses out in the current scenario.

They lose tgeir child benefit if the other parent earns over £60k (tapering to 80k)
They lose the childcare subsidy at £100k. Which can mean the childcare is more than their wage.

A whole family assessment is fairer for the lower paid parent.

We're all working & paying taxes whether we earn £100k or not.

I agree it's unfair but don't imagine you are the only ones. What about the couple on £119k who still get full child benefit, while a single mum on £80k gets nothing.

Be careful what you wish for !

No? These are the people paying around 50% of all income tax collected.

Yes, like the NHS.

I only earn £28k a year but, yes, that's really unfair. I also think that the PA should increase to £20k.

You missed the word principle. The principle is precisely the same.

Exactly, and helping to pay towards the welfare system. I have no skin in the game as I earn less than £30k, but even I think it's unfair.

It is outrageous.

I have two in nursery at the moment and my ‘free hours’ plus tax free childcare for both is worth around £25,000 (my actually childcare bill is £50,000).

To earn the £25,000 I lose in tax free childcare and free hours, I have to earn an additional £55,000 over £100,000. If I don’t - I actually would lose money.

It’s crazy. I live in London and so many people are impacted. And the result? Loading huge amounts into pensions (and claiming it anyway), working part time and some even stopping work entirely (if a much lower earner). All the doctors I know work part time - purely because of this. It is mad.

I can’t see it changing though as we are seen as ‘the rich’, regardless of the threshold for ‘rich’ seems to have been frozen for at least two decades.

I pay vast amounts of tax. I have always been happy to do this. Being excluded from this policy has really radicalised me though - what’s the point of a high tax burden if I can’t use the benefits that funds?

How much are you earning to take this position of ‘I can afford it’?

As I have not encountered anyone earning over the threshold who thinks the situation with the new free hours is fair.

Say your free hours and tax free childcare are worth £15k, you need to earn £135k just to… break even with earning £99k. Earn less than the £135k and you lose money.

‘I can afford it’ - so you in the above scenario are happy working for free for a quarter of the year… why?

This drives me mad as its so unfair - if I earn £120k per year as a single person versus a couple earning £60k each and we both have 2 children then the couple are aprox £1400 PER MONTH better off - this disproportionately impacts high performing single women - regardless, mumsnet should be campaigning against the unfairness of this - this takes into account child benefit but not childcare costs which skew this even further

All figures are approximate

I’m your pretty typical Labour supporter and I would welcome removal of these cliff edges. It’s unjust and doesn’t work and creates negative ripples across many areas we all need (doctors, GPs going part time for tax reasons and they wonder why there is a constant shortfall and difficulty recruiting). So I think many “Labour People” would support these sorts of changes as long as they don’t disadvantage those at the other end who are often as equally needed as the higher paid folk

If you fall off this particular cliff edge, you are on a path to earning much more than that danger zone of 100k-120k. How about you be grateful that you've got more money and more assets than pretty much everybody else who works every bit as hard every day as you for a fraction of your salary. They've got no excess to hide in a pension for yourself later on in life, no assets like property and nice cars etc to ease yours and your family's path down the line.

The greed of high earners never fails to shock me.

Try a week of hard physical labour in a factory on minimum wage.

Ungrateful, privileged and entitled. Moaning that if you get more, you pay more.

Millions have no opportunities like you've had.

People earning £1M are entitled to PIP. Why do we means test some benefits but not others?

Not any more it’s available for everyone who gets UC. My friend is on a decent salary but after her husband left her she gets help with the childcare element and therefore entitled to FSM.

My oldest was £85 a day when they started - it’s now £115 a day. In three years.

Thats an extra ~£7,500 I need to pay for the same aged child at the same nursery - and I need to earn double that to get that after tax.

£15k required increase in income in three years to continue to fund the same nursery place.

Its still a cliff edge. Either you get UC or you don't. The difference can be pennies. Almost half of school children get FSM now. I anticipate it will become a contentious topic as more people realise.

Child benefit for two kids is worth ~£2300.

My loss of free hours and tax free childcare is currently worth around 10x that a year.

It’s an absolutely massive penalty.

Tax should be flat on earnings, one rate everyone pays. The tax free allowance should outpace inflation. We should tax unimproved property. No IHT, no capital gains. We need a radical rethink of tax and our expectations of who pays it and why.

Can you understand that if you get rid of this cliff edge THE GOVERNMENT GETS MORE MONEY? Not less. More. More money to improve public services. So get over your envy and get behind the scrapping of this stupid policy.

There are lots of ways and means to reduce your salary to get it under the cliff edge - yes its really unfair but there is solutions such as pensions, car lease ect . Its a nice position to be in.

Again if on a cliff edge theres ways to bring your taxable income down. You only have to qualify for one month UC to get it for the whole year. It’s not a fair system , but there is always a way if your hands are tied and your forced to find a solution.

PIP is designed to help people with disabilities to meet costs that able-bodied people never have to think about, much less pay. If you have a disability and earn £1m, you're still a person who has to live with a disability and face all of the financial and other challenges that it brings with it.

Problem there though is:

1. you have to cap your income at £100k. Thats a bit over £5k after tax with a student loan. A mortgage of £500k is around £3k a month. Having to cap your income for several years presents a real challenge in HCOL areas. And of course this threshold has been frozen for a decade already - and every year living costs increase.
2. If you can put money in your pension, it just kicks the problem along to those earning above ~£150k - and then people still change their behaviour as a result, predominantly working part time. Or - their partners stop working instead, taking a person out of the workforce entirely.

I find it bizarre that leading a car is seen as something legitimate for government tax relief, but not childcare. I don’t need an expensive car, I go to work on the train - I do however need childcare to enable me to work!