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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To be pissed off at the new tax free childcare

974 replies

childcarechallenge · 14/02/2017 10:58

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?

OP posts:
EweAreHere · 14/02/2017 14:07
Biscuit

Not reading the thread.

Fakenewsday · 14/02/2017 14:09

i'm not sure that was the point, some professionals do have the luxury of trading out of something like London based consulting, for example, to work in an IT department in a firm in a small town for a pay cut and better quality of life. A carer is obviously going to have a smaller choice set but people generally give advice to the particular op in question.

Wishforsnow · 14/02/2017 14:09

I was not including carers obviously that is higher stress and 24/7

Original poster
childcarechallenge · 14/02/2017 14:09

Yippie I haven't priced up a nanny share, maybe i ought to. But I had always thought that the risk of the nanny becoming long term sick or pregnant was something we couldnt really afford. Also, given that DCs are in nursery so long, i wanted stability of the same place instead of moving DC2 into nursery once DC1 starts school.

I agree that we have many years ahead of us that will be high income once they are both in school and we are only paying for wrap-around care and school holidays.

We also haven't always earned these big salaries. My salary before mat leave was 38 and DHs (total) salary last year was 90, the year before that 60 (I know still big relatively, but my point is that he wasn't earning 100+ when we had no children, or even 1).

fakenews i think you are right. We need to sit down and properly price up the move (financially and otherwise) and yes MIL would love to come out for weeks here and there. I've heard that its best to not take the DC home in the first 8-12 months as it doesnt help them settle.

OP posts:
JaxingJump · 14/02/2017 14:09

Take a look at how to bring yourselves under the threshold. And I don't think you need to apologise for upset at being given £20k and having to give £18k of that to the taxman. Regardless of how rich or poor you are nobody likes to hand over 91% of their money!

trevortrevorslattery · 14/02/2017 14:10

psssst

chloe84
nannynick

Where might one find out information about how to sort out the extra pensions contributions please? Or is it best to speak to an accountant?

Wishforsnow · 14/02/2017 14:12

I can't imagine many people would want to work and give 91% of their bonus to tax. It certainly would not motivate many to work.

WaitroseCoffeeCostaCup · 14/02/2017 14:13

Here we go again, rich people that think only rich people work hard. Try doing 70 hour weeks for half of what you've quoted before tax!
You have more 'left over' than most people have full stop.

PigletWasPoohsFriend · 14/02/2017 14:14

We also haven't always earned these big salaries. My salary before mat leave was 38 and DHs (total) salary last year was 90, the year before that 60 (I know still big relatively, but my point is that he wasn't earning 100+ when we had no children, or even 1).

They are still very good salaries

I think you have lost touch with what good is tbh.

Original poster
childcarechallenge · 14/02/2017 14:16

Piglet I did say that they were good...

Waitrose What do you do that has 70 hour weeks and half the salary?

OP posts:
AntiHop · 14/02/2017 14:16

I live in London. Our household income is much, much lower than yours. We both work full time. We have a 2 year old. I'd love to have another child but we simply can't afford 2 sets of nursery fees. We have literally nothing left at the end of the month. So we'll have a wait a few years, by which time we'll be in our 40s so may not be able to conceive.

Your household income is in the top few percent. Therefore means tested support will not be available to you.

Bluebellevergreen · 14/02/2017 14:16

Not reading this thread as I am trying to release some oxitocine but £148.000 a year between you 2
We take home £50.000, I work full time and commute 4 hours a day. DH works as many hours as your DH, full time job and firefighter (talk about stressful?)

So nope, sorry but NO

KatyBerry · 14/02/2017 14:17

you do all realise that your tax credits / benefits / public sector salaries etc are all being contributed to handsomely by this well paid husband? so thanks for that contribution. That's not the issue.
The issue is a SHORT TERM cashflow one because of expensive childcare being paid out of taxed income.
B*ggering off to Hong Kong and living with maids for a few years is not goign to solve the issue because you will come back in a fwe years, not having worked and will find it extremely difficult to get back into that £48k role which should be a £60k one by then, with vastly reduced childcare costs. Do what people do - suck it up for a while, and be grateful that you're in a position to be a net contributor and that you will benefit from that system if you ever are not.

Fakenewsday · 14/02/2017 14:17

yes - you need a proper planning session very soon and you need to talk as a couple about whether it's honestly in anyone's best interests for you to proceed with the new full time job in light of a move happening soon anyway.

almondpudding · 14/02/2017 14:17

They're not giving 91% of the bonus to tax. £4000 of that money is childcare money they were going to claim back off the government.

And it happens to poor people all the time.

You move from one job to another, lose a range of tax credits, and find that 90% of the salary difference you don't actually see.

Bluebellevergreen · 14/02/2017 14:19

katy we all contribute as tax payers thanks

KatyBerry · 14/02/2017 14:21

we're not all net contributors though - clearly there are plenty on this thread who are not taxpayers either - several mentioning salaries below taxable thresholds for eg. And guess what - we need a lot of those net contributors so let's not slag them off purely for the fact they earn more.

amyboo · 14/02/2017 14:21

I live in a country where you don't even need to earn a lot to be taxed at astonishing rates. DH gets an annual bonus as part of his job and generally pays about 60% tax on it. He also gets "holiday pay" (standard part of working contracts in this country) in May and December of just under 1 months' salary each time. Those get taxed at around 65%.

So, yes YABU to complain about losing out on benefits that are supposed to help people on lower incomes. £148k/year between a family of 4 is huge!

LauraMarling · 14/02/2017 14:23

The only way this situation would be unfair is if everyone earned the same amount and you were being taxed more.

Your earn more, you pay out more.
Because after tax you will still have more!

Natsku · 14/02/2017 14:23

I can understand it must feel like a kick in the teeth to get a big bonus but lose most of it but as long as the bonus isn't actually making you worse off then you are really BU to complain.

Frankly I think you'd be better off moving and your DH taking a lower paid job with shorter hours and then you'd have a better quality of life as well as a decent income with smaller out-goings. Everything is a trade-off - if you want to live in London, have jobs with good income and prospects (and remember how much more you will have once the children are in school) then you have to take what comes with it, which is more taxes. You are still much better off than the majority of people in the UK, consider yourselves fortunate and look forward to being pretty damn well off in the not-so-distant future.

If you are planning to move abroad, remember to weigh up the problems with life as an expat. I moved abroad ten years ago (not for money purposes!) and it is difficult being away from family and I am much closer to the UK than you would be in Hong Kong, plus the loneliness, which you'll experience a lot with your DH working such long hours.

frogmellla · 14/02/2017 14:24

Your own fault for going to working and dumping your kids.

venusinscorpio · 14/02/2017 14:25

People are getting criticised for being ignorant about the hardships of other people's lives and whinging about their positions of relative privilege. Not for being high earners.

WaitroseCoffeeCostaCup · 14/02/2017 14:25

I'm not saying that we are poor - far from it, but he did earn that bonus, it's not just luck of the draw, so to only receive 9% of it really stings.

Actually, it really is. Why did he earn a ridiculous bonus more than someone that cleans stinking toilets all day every day?

frogmellla · 14/02/2017 14:25

Going back to working it should of said.

Anyway if you don't like it, look after your own children instead of paying someone else to or leave the country.

MuseumOfCurry · 14/02/2017 14:26

You need a better accountant.