To think Tax Credits *are* benefits?

[Bluemoonrising]

One of my friends was being very derogatory about a mutual friend who gets additional benefits for her son who is seriously disabled. She was saying that 'she didn't know how she could justify receiving benefits, just to raise her children'.

Apparantly she's not on benefits as such as child benefit is different, because everyone with children can get them, and tax credits are not a benefit, it's a 'credit for tax paid'.

Ummm.... no it's not. It's a benefit.

of course they r benefits
i am getting them
without them id starve to death alongside with my 3.3 yo DD

"Tax credits = taking tax off you, paying a little bit back and telling you its a benefit (oh and please vote for me)."

Can you see why I am frustrated now, shewasashowgirl??

No sooner have I explained that this isn't the way it works, someone else comes along to say 'oh they just take the tax off, give you a little bit back and tell you they're being nice'.

Broken record.

IT ISN'T HOW IT WORKS.

SOME people get a lot of tax taken off them and get nothing back (in Tax Credits, I mean)

SOME people get a lot of tax taken off them and get a tiny fraction back

SOME people get a moderate proportion of tax taken off them and get a small proportion back

SOME people get a moderate proportion of tax taken from them and get a significant proportion back

SOME people get a little tax taken from them, and get much more than they paid back.

SOME people get NO tax taken from them, but get a significant amount of 'tax credits'

It doesn't work that you get £x taken from you so get refunded £y.

Here's an idea, simply not take the tax off in the first place?

Because in return for telling HMRC all about your family situation you are rewarded with money that they are happy to let you have anyway, this was the party that wanted ID cards too remember.

TIANC I am not a wine drinker, but when needs must

"Here's an idea, simply not take the tax off in the first place? "

mamtomany - so what are you going to say to the thousands of families who get £2 deducted in tax, and £12k awarded in Tax Credits?

"Oh lookey lookey, you are better off because we don't tax you now!"????

Some families get more in Tax Credits than is deducted in tax.

I meant £2k...see what you are doing to me? I can't even type properly for the blood

Yes I get that thank you ...i'm not going to say anything to them, what can you say their wages don't pay the bills, they might think they are supporting a family but they aren't they are dependent on benefits. Call a spade a spade, but at least they are out there trying to earn a proportion of their income which is more than some people do.

Money you give the government us called tax.
Money the government gives you is called benefits.
Tax credits are benefits.
The end.

"they might think they are supporting a family but they aren't they are dependent on benefits"

We all are mamatomany. It's just how it is dressed up that makes it more socially acceptable.

If you are treated for lung cancer, say, on the NHS, just 30 tablets of Iressa cost £2-3000. You get it free.

Lots of operations cost hundreds of thousands, you get it free.

We all get the 'benefits' of our society. Just because some people receive some of them in a top-up of cash doesn't change anything.

Tax credits don't reduce the tax you pay. The this that do that are called tax breaks. Tax credits are money the government gives you so are benefits.

They are benefits, they are payed for out of the welfare budget.

Lougle - getting more in tax credits than they pay in tax is fine - but why take the blurry tax in the first place??? Think it through - nobody is saying lower income people dont need support - but why tax the lower paid at all - only to give them money back?

Sorry lougle - it is exactly how it works. Lets cut the crap eh? Benefits - for that is what they are - are handed out to those that dont really need them (bit like CB for higher rate tax payers) to give the middle incomes a stake in the benefits system. Thus making it harder to scale back to those that really need it.

Consider this - for every pound HMRC takes off you, they use 19p or so of it in simply taking the tax off you. Simpler tax system = cheaper to administer = less taxes needed to be taken to fund the things we as a society require. Simples.

We have one of the most complicated tax systems in the world - who benefits? Tax accountants, HMRC. HMRC managers get bigger budgets, more staff and more pay.

The state doesn't have any money other than that it has removed from your pay packet under threat of prosecution. It therefore should have a moral duty to maximise its efficiency in how it processes and spends those funds. If we as a society agree that supporting the low paid is important and agree that taxes should support it, then the state should ensure it does so in the simplest way. That way more money is available at the receiving and giving end.

Of the 6 cases you stipulated Lougle, 5 would all be better off in a system and the 6th would also be significantly better off as there would be more money available.

And as for the people who only get £2 charged in tax and £12k back, the mere fact that they wouldn't have the £2k taken in the first place and the aggregate benefit of not having to employ thousands of people and spend £millions losing tax records would mean that they would be able to get £12k+2K.

Anyone working a 40 hour week and earning the minimum wage will be liable for 20% tax on a little under half of their earnings. How is that fair so that a comfortably off middle earner can have their tax credit???