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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to be pissed off that DH has had a bonus cos tax credits will take loads of money off us

368 replies

FuckingTaxCredits · 23/03/2015 18:06

have nc doubt the dm readers will be out in force for this one

dh has had an annual bonus of 2700

which should be awesome news but I nearly cried when dh told me

as this happened a few years ago as well, and i know that when I do our tax credits renewal they will end up royally screwing me up the ass and taking loads off us. even though dh will prob come out with 2k, max, of his bonus, if he is lucky, but tax credits will take the whole amount off us

so it will hit ME in MY pocket cos dh is doing well at work

bonuses should be just that, a FUCKING BONUS

so pissed off

OP posts:
Arsenic · 24/03/2015 09:17

I think they effectively get to keep £900 Awake. Not £1300.

Which IS a pretty steep effective tax rate of 65% or therabouts.

But it doesn't leave them back at square one.

seriouslypeedoff · 24/03/2015 09:17

So is your peeve that its worked out on pretax income?

I get that its annoying that he has worked hard to get a bonus and you won't see the full benefit, however in the long run you are still better off. Are you suggesting bonuses shouldn't be considered at the pretax stage?

JennyOnTheBlocks · 24/03/2015 09:18

ok, half the bonus then?

whatever the maths is, in reality the bonus doesn't feel like the extra it should do, because it's being used to top up the family's low income.

AwakeCantSleep · 24/03/2015 09:20

OP seems to think her tax credits will come down by around £700 hence the £1300 figure.

It is true that effective tax rates are very steep as benefits are withdrawn but that's kind of inevitable.

Arsenic · 24/03/2015 09:23

I'm a bit confused about how she's arriving at that, TBH.

Maybe there's more to it?

HelpMeGetOutOfHere · 24/03/2015 09:24

Bet a lot of those of you saying that you can't afford a holiday aren't talking about a weeks caravan in selsey bill? Just because someone says they are going on holiday doesn't necessarily mean a fortnight fully inclusive in the Caribbean!

We both work full time and are lucky enough to not receive tax credits, doesn't mean we are rich though but we have holidays. It could be abroad one year and a long weekend camping in the new forest the next. Both still holidays though.

Littlemonstersrule · 24/03/2015 09:31

The OP could have had the full benefit of the bonus if they didn't claim tax credits. If they both work its either very few hours between them or both on NMW but those kind of jobs don't usually come with a bonus.

It's likely the tax credits claim exceeds the income tax they pay anyway.

Moaning you can't keep the full bonus and full benefits is greedy whichever way you look at it.

Arsenic · 24/03/2015 09:37

We don't know the circumstances Little. OP could be a carer or in poor health or studying or some other scenario.

ClumsyNinja · 24/03/2015 09:48

FFS!

The OP and DH both work.

They have 3 children.

Unfortunately, their total income is still low according to the govt. as they receive working tax credits. It's not the OP moaning about not having enough money. The govt. says they are earning under the threshold so they will top up the family income with tax credits to help them out.

The full gross amount of the bonus will be assessed in the calculation to determine entitlement to tax credits. They will not include pension payments, childcare vouchers etc. but essentially, for the OP, it's the full amount that will be assessed. That's how it works.

If DH had won £2700 on a bet at the races/lottery ticket, they'd get to keep the full amount.

But he worked hard and earnt a bonus from his employer.

The family will now be financially worse off! Plus they will have to juggle with less money next year as the bonus isn't a regular monthly payment.

How is that lucky?

Why should the OP be grateful?

JennyOnTheBlocks · 24/03/2015 09:54

YY Clumsy

was just coming back to reiterate the fact about their initial income being BELOW what has been found to be neccessary for their family to live on. The OP isn't claiming tax back because of a loop-hole, it's because her income is low.

Living standards should be improving with time, we should not be punishing workers who take the lower paid jobs.

Arsenic · 24/03/2015 09:54

Oh yes she said she worked in the last line of her last post. Missed it, sorry.

Arsenic · 24/03/2015 09:57

The family will now be financially worse off!

How? Why? Please could someone explain why worse off? Confused

I can't work out what I'm being thick about.

ReallyTired · 24/03/2015 10:03

I can understand exactly where the OP is coming from. Her husband has has worked bloody hard and will not get to see much of his bonus. My husband had a similar experience and lost 67% of his bonus because it pushed his income above 50K.

I feel the adminstration of both child tax credits and child benefit need reforming. We have been in a position needing child tax credits when three years ago dh was unemployed. We had to return hundreds of pounds really quickly when dh got a well paid job. I had no problems with returning the money, but the child tax credit people could have at least had the decency to have waited for DH first pay check.

People who get bonuses tend to be go getter type people who improve the finances of the nation. If we are ever going to get the ecomony on its feet we need to encourage hard work. Otherwise there is no moviation for anyone to put in the extra hours to make a bonus happen.

ReallyTired · 24/03/2015 10:04

"How? Why? Please could someone explain why worse off? "

Working extra hard incurrs extra costs. It is not just losing child tax credits/ child benefit/ extra tax.

Arsenic · 24/03/2015 10:08

True enough Really but is that what the thread is about?

I'm really confused now. OP seems to think she'll be seriously out of pocket.

Charlesroi · 24/03/2015 10:10

You'll be better off than you would be if DH hadn't got the bonus. If you use the money to pay off the credit cards and the holiday, that will be money not being spent when the tax credits are reduced so can be used to top up the household budget. (Assumes you're not spending less than £58 pm on cc and holiday savings)

TheOddity · 24/03/2015 10:15

Three words. Joint bank account.

ssd · 24/03/2015 10:19

arsenic, she'll be out of pocket as she recieves the tax credits (and thats tax credits, not working tax credits, clumsyninja, two different things) and presumably gets to keep them, her dh seems to get to keep the bonus, and as the bonus will bring the tax credits down she will receive less whilst he gets the same in bonus

thats why shes pissed off.

MajesticWhine · 24/03/2015 10:20

The tax credit system shouldn't include a disincentive to work hard and earn extra. I think if OP's sums are correct, then it's a flaw in the system. The system may have been generous to the OP, and they can book a holiday etc which others haven't been able to afford, but actually that is not relevant. It still doesn't make it sensible for them to be worse off having earned a bonus.

ssd · 24/03/2015 10:21

theoddity

three words. fucking spot on.

Arsenic · 24/03/2015 10:24

That's what I thought at first ssd. But then OP said dh would put the money in my account if I asked, he is not a twat or financially abusive or whatever.

ihategeorgeosborne · 24/03/2015 10:27

As ReallyTired, points out, this is the same with the 50-60K cut off for losing CB. Dh got a bonus last year of £2700. He paid 40% tax on it and we lost all our CB for 3 dc. It isn't just tax credits where you get marginal tax hikes.

scallopsrgreat · 24/03/2015 10:28

"dh would put the money in my account if I asked" Why would you have to ask?

Agree comepletely with ssd and TheOddity.

Arsenic · 24/03/2015 10:31

Well YY to joint a/c then.

It's not a tax credit problem though.

PigletJohn · 24/03/2015 10:35

There's a lot to be said for earning heaps of money and paying tax on it.

However sometimes it is worth increasing the payments to your pension scheme, as this is deducted from gross and reduces your taxable pay. One day you might be glad you did. You may only be able to move them up and down a limited number of times per year.