There’s NO point earning over £50k?!

[ThisReallyDoesntAddUp]

Because of the £50k child benefit limit and 40% tax rate!

So I earn £78,000 pro rata overall now with my job following a mid year pay rise. This includes bonus and car allowance. I work 4 days a week (80% equivalent) which brings the overall pay this year down to just shy of £50k with a £9.6k bonus.

Out of the £9.6K bonus due in March, I’ve worked out 40% will go to the taxman, over £2K will need paying back for child benefit as I’m now over the £50k threshold, and a further £800ish will go towards my student loan. Deductions of just under £6k!!! This means I’ll only take home 30% of my bonus?!

I’m now on mat leave for baby number 3. AIBU to make sure when I go back I remain under the £50k mark by reducing hours even further?! I’d then have less to pay in childcare mitigating the difference in the pay I’d receive working an extra day each week.

Its an absolute joke, I was hoping to go back to work after my last baby and push on hard with my career but what is the actual point!! I may as well work less hours, keep the child benefit and pay less in childcare!

You dont lose all the child benefit at £50k. It tapers.

That's exactly what OP is considering, since she mentions in her OP that she may reduce her hours.

Which, if Hunt doesn't fix this with the Budget on Wednesday, is a good idea for her. Bit unfortunate for the Exchequer though, and for any of us who might need whatever services it is that she provides. Hence the wider problem. The 50-60k marginal tax rates serve as a disincentive for parents to work, and they need addressing asap.

It's one of those things isn't it - I was earning over that when I had my first child so I've never claimed child benefit, and therefore never had it to "lose". With any means tested benefit there's going to be a sore spot where you "lose" it. But actually, it means you don't "need" it and that's a good thing surely?

This boils my piss. I earn £34 000 in the voluntary sector. I have two degrees, work very hard at what I do.

More salary does not necessarily mean more effort or working harder.

Can you pay your 9k bonus into your pension? That’s taken out pre-tax so doesn’t get taken into account for earnings and child benefit. I’ll be in a similar situation next year (been on mat leave most
of this financial year so well under the cut off). I’ll earn around 55k next year so looking at options to either overpay my pension a bit (to offset the 2 maternity leaves I’ve had and bring me just below 50k) or just taking the hit on tax and child benefit 🤷‍♀️.

This boils my piss. I earn £34 000 in the voluntary sector. I have two degrees, work very hard at what I do

Then play the game and get a better paid job, with 2 degrees you should be contributing more tax to help those less fortunate.

For people that work hard and don't see the reward? Yet you can not work and be given house / money / child benefit etc....

@notanothernana

You're right. But the previous poster didn't say that earning a higher salary always means working harder or that people who earn more universally work harder.

They said that the OP has probably worked hard to be promoted and that hard work should be sufficiently rewarded. Where's the disagreement? If you saw an opportunity for promotion at work and worked hard for it and got it, wouldn't you expect to see a significant improvement in your pay? Would you work hard for a promotion that didn't result in a significant increase in your take home pay? There may be reasons for doing so, of course, but pay is an important factor, obviously.

Insufficiently incentivising people to do more productive, tax-paying work is a failure of the system. Whether the people, who as a result of this failure, choose to do less work and pay less tax, are privileged or fortunate is irrelevant. Productive work should always pay.

Always that easy to get a better job?

I am not sure why people on disability should be grateful to you high earners. Isn't being disabled hard enough that they also lose their pride too?

I think OP should have known how expensive childcare was and suck it up. You chose three. If you can tell a low earner not to have children if you can't afford them I am certainly saying it to you.

Yup

Also, isn’t this what we want for women, to have middle class money problems instead of always been the low or no earners? Don’t ask for social mobility then kick people down for moving upwards!

Lots of us work hard and don’t see the reward - as our salaries are not as high. Your salary is not representative of how hard you work or even of your educational achievements. Many of us work in the voluntary sector and give back this way but we are on lower salaries as a result. I work hard and am highly educated. Also a better paid job is not necessarily a ‘better job’.

If earning over 60k you need to stop child benefit asap if you’re still receiving it, you will need to pay back if you have been receiving it whilst he’s been earning over £60k. I know someone who ended up owing a couple of thousand as they didn’t realise the cut offs. But even though you won’t be receiving the child benefit money you still get the ‘credits’ for it for your NI so make sure it’s in your name if you’re not working so that you get the credits from it. You need to phone them asap and get it sorted.

Pension, GAYE or Cycle to Work would all be useful - go treat yourself to a whizzy electric bike! :)

Either you give back through your actual work (and earn less), or you earn more and give back through tax. I do agree that the CB rates are unfair as regards single earner and double earners though, it should be based on total household income.

You are viewing this as a high earner Vs low earner issue, but it isn't.

Of course people shouldn't make rude remarks... But the OP hasn't. She hasn't told lower earners not to have children. I know that people do sometimes say this and you're quite right it's very unreasonable. However, you have literally projected these remarks onto OP to justify your position of being rude and unreasonable about her choice to have children. This way of debating doesn't elevate anyone!

At the end of the day, if working longer/harder doesn't yield sufficient rewards for the OP, she won't do it. Therefore she will be less productive, and pay less tax. You will not benefit from this. Lower earners will not benefit from this. People on benefits won't benefit from this. The salary she chooses not to earn won't be diverted into your salary. Society as a whole is damaged by perverse disincentives to productive work, even if they only affect relatively high earners (actually, the same problem can crop up for low earners too at the intersection between benefits and minimum wage).

🙄

Not privilege. Probably has worked, and bow works really hard for it.

Yes exactly this! People complained when everyone got it and wanted it means tested and now that it is means tested they complain about the cut off point!

All of this.

The heart bleeds people are the equivalent of the ones complaining that people on UC won't do more hours, on the benefits threads. In both cases, they're failing to see the wood for the trees. People respond to incentives, and unfortunately we have a system that sprinkes a lot of disincentives to work, both for high and low earners. We need to fix that for all our sakes, regardless of anyone's subjective view about who's taking the piss.

She doesn’t provide any services. She’s got three kids, that’s using all the tax she pays.

Yes, and her three children will also earn and pay tax when they are adults. The education and health services they use are not an investment in the OP, but in her children themselves, for them to become productive individuals in the future. They aren't receiving anything more than each and everyone of us born and raised in this country has received. You are attempting to count their costs against the OP without counting their contributions.

Way to miss the point. 🙄

What was your point?