So child benefit to go for higher rate taxpayers

[foxinsocks]

So says George osbourne on breakfast telly. Missed the details but sounds like it comes in from 2013!

"If you want to work the system - there will be ways around it, no doubt. Just ask some of the long term people on benefits."

Actually, I might pop round to my local Tory MP's house for a cuppa and get some pointers on offshore trusts and non dom status. That's the key I think. Just make sure everything you earn over the threshold is safely stashed in a tax haven.

According to this if one person is paying HRT, it goes.

If two people are both paying basic rate tax, it doesn't go.

So you could be earning £45k as a household and not get it, or £86k as a household and get it.

@gaelicsheep - I'm more of an increase tax kind of a girl.

Personally, gaelicsheep, I would rather see a more measured approach such as Alistair Darling's which would have been less dangerous to the economy, as well as more serious attempts to tax the financial industry properly, and to close tax loopholes for the super-rich, rather than focussing on those with lower and middle income and decimating public services.

"But it also implies that the HRT is to tick a box, a lot of HRT don't fill in self-assesment forms, this will create MORE paperwork and therefore cost more to administrate."

Afaik if you are a higher-rate taxpayer you have to fill in a self-assessment form even if you pay tax through PAYE.

Why shouldn't cuts hit the better off more than the actual poor?

Crazy if they're really envisaging a situation where £1 of extra earnings could mean a lot less actual income.

I should think anyone in our situation - just fractionally into the 40% band, but by less than the after-tax value of child benefit (£1750ish per year for 2 kids) - will just end up opting to pay extra AVCs to keep themselves below the limit.

So merrymouse, you wouldn't mind if GO was proposing to increase the higher rate to say 60%? Or only if the threshold was above your/your DH's earnings?

scaryteacher, it looks like a tax increase because of the way it will be administered, but they are not taxing CB, they are taking it away, so yes he will pay 100%.

nah, you don't have to fill in a tax return just because you are a HRT

"Afaik if you are a higher-rate taxpayer you have to fill in a self-assessment form even if you pay tax through PAYE"

Nope MYTH, only if you earn over £100,000.

gaelicsheep. Why assume that everyone who is a higher tax payer can afford to lose the benefit.

We cannot afford to lose the benefit and there must be thousands of other families in our situation. I know families who earn a pittance but they have more disposable income than us because they were shrewd enough to buy a house before house prices went crazy.

We cannot afford to lose our child benefit. It pays for food and clothes for my children. I said earlier in the thread that this will mean that I have no choice but to leave dh and I am not being dramatic I now have no choice this is the final straw we can no longer afford to stay together. How do I look my children in the eye and say that I am splitting up their family because we can't afford to stay together. What is the fucking point?

Meg - not at the moment. It was scrapped about 4/5 years ago for HRT payers that had straightforward situations - ie. one job, no self-employment etc.

merrymouse - do you not see the irony? The people who are going to be affected by the loss of CB are exactly the same people who would be hit by any tax rise.

"What do cuts like these really mean to a high earning family? Skipping a holiday perhaps, running one less car, or really not being able to eat?"

If you are unfortunate enough to have to work in the south east, and have the mortgage to go with it, then yes, it could mean either running no car, or cutting down on food.

Obviously it would be wonderful if there wasn't such a concentration of jobs in the south east and it wasn't so over crowded and expensive, but at the moment, £44K for a family of 4 isn't a large amount of money.

Yes the balance between services received and taxes paid needs to be adjusted. However, this seems an incredibly clumsy and clunky way of doing it though.

A 2 child maximum across the board would have been a better and fairer cut.

A blanket £20 for one child, £30 for two would be a lot easier to administer than "oh wait a minute we will STILL give you your CB but then take it off your husband in tax which he will then need to fill in a form for every year and we will need to administer it because we are super efficient at doing that and never make mistakes"

Or scrap CTC and make Childcare affordable for all.

thedollshouse - how can it be better to run two households? If you are earning enough that you are going to lose your CB then you won't be eligible for any other benefits will you?

I see as this as yet another kick in the teeth for us from the Gov - we are a single income family with 3 children under 7, living in the SE and with a huge mortgage - our single income is over the HR threshhold. As we rely on a public sector income we have pay freezes and job insecurity already.

The 'cheap' method being employed to avoid expensive admin costs means it is not as fair as it should be and although I appreciate that dual income familys can have increased child care costs to deal with it still feels unfair.

I support the concept of universal benefits and am concerned about the loss of my Home Resposibilities protection - how will that aspect be administered and how much will that add to the costs of implementing this policy? Is that included in working out the £1bn we are meant to be gaining?

I am all for redistributive policies but this does not feel like a truly progressive method to me.

I did not and never will vote Tory (or Lib Dem) and do not want to come over as a whining pampered house wife - my youngest DD is going to be starting school in 2013 and I was planning to go back into employment in some way then anyway but I just feel this is the thin end of a very nasty wedge.

Something had to be done about CB, cuts have to be made and it's only right that wealthier people who don't need CB get it cut.

Every situtation is different, I know, but if someone is earning enough to pay higher rate tax then they shouldn't need it.

It won't affect me as my child will be 18 by then and I have never earned anywhere near the higher rate threshold yet I still only got the same CB as someone who has and the extra money isn't just 'nice' to have but absolutely essential to someone like me as a single parent on a lowish income.

Time for everyone to cut their coat blah blah.

I'd like to see the fine detail on how this will be administered first Zep. There has been no confirmation of how the mechanics of this will actually work that I can see in the press.

I understand they are not taxing it, but why ask for details on DH's ITR in that case? It is undermining the principle of independent taxation.

Am watching The Daily Politics Conference on telly at the moment and as the guy on there says, this is just the tip of the iceberg. You think this is bad? Shocking? After the Tories promised, in their election campaign that Child Benefit would be protected? That's the least of our worries. This is the tip of the iceberg.

The Tories, with the excuse of our current position, will be able to approach all kinds of holy cows and dismantle them. There will be uproar, but what can we really do about it?

I didn't vote for the Tories. For anyone who did, you wait and see how destructive a political party can be. You think that NuLabour were bad? Well, you ain't seen nothing yet!

A 2 child limit would not be fair to the 3rd or 4th children, especially in families whose parents might not be prepared to give up their own luxuries to compensate (fags, booze, etc). If they only brought in the limit for subsequent children but protected existing ones then I guess the savings would not be achieved quickly enough.

Let's hope this is one of several interim measures until IDS's very sensible proposals are adopted.

I find this an extraordinary move by the Government, purely because of the disproportionate affect it will have on families where one parent chooses to stay at home.

DH should earn just over £44,000 this year but I don't work as I have 2 small children and have chosen to stay at home. I imagine this is a choice many families make when their children are small.

We will lose our child benefit.

But if I worked, DH and I could have a combined income of £87,000 and we would still receive the benefit.

So when I need the benefit the most, it will be taken away from me.

If the Government's policy is to encourage more women into work, they should just say so. Oh but, then they'd have to do something about the soaring costs of child care.

'if someone is earning enough to pay higher rate tax then they shouldn't need it.'

The male in the partnership may be, but not always the Mum. It's not losing the CB that worries me, but the HRP for those women who stay at home to look after their kids and who will now have a massive shortfall in their pension contributions.

You also assume that income is shared - not in all households it ain't as has been demonstrated on MN time and again.

I agree that pegging it to the size of the family might be fairer.

So I will now have to fill in a tax return which someone will have to send me and someone will have to process (I don't get a form at present). I reckon that will eat a fair chunk into any saving GO makes from denying me CB. Seems to be a bit of showboating as far as I can see. It will be interesting to see the real saving, if any.