Salary sacrifice and child benefit

[mike1May]

Not sure if this is the right place to post this.

Anyway, with the salary sacrifice schemes that exist, is it possible to sacrifice enough of your salary to still be able to get the child benefit?
For example, if I earn £200 over the higher-rate tax threshold, could I sacrifice this as part of a cycle-to-work scheme, childcare voucher scheme or whatever and then be able to still get child benefit?

Sacrificing that £200 could be worth thousands.

[greenfly]

minipie the mentality is the same as for benefit cheats 'this shouldn't apply to ME' - legal loophole or not.

[ChasingSquirrels]

it isn't a legal loophole though - it is a tax benefit put in place to encourage people to save money into their pension. To provide for themselves - so that, in later years, the state doesn't have to.

It isn't something that the government/HMRC don't know about.

[DinahRod]

It is possible to use salary sacrifice childcare vouchers and possibly also increase pension contributions to bring you under the cut off point and regain CB. But you would probably only do this if you were on the 44k threshold or a bit above. Public sector workers might also want to wait for the govt pension review which may well achieve this automatically for dh's salary.

[lilac21]

So a single mother on 44k is a very well off single mother? Well, right now my mortgage is £850 a month, but likely to be over £1000 quite rapidly once the base rate starts to increase. Add on the fuel, petrol, council tax etc and that £140 a month child benefit makes a big difference to me.

With the 40% tax threshold being pushed downwards, I am certain to be affected by this. I will accept that, as I know I am considerably better off than millions of people (I actually earn £42k but have had a public sector pay freeze), but I cannot accept that two parents earning £40k each can get the benefit when I cannot. It's daft and unfair.

[greenfly]

Chasingsquirrels - they would be using a benefit, intended to help those in greatest need, to boost their pension. Is that morally right?

[greenfly]

Lilac - yes of course you are well off for goodness sake and you presumably chose to have such an enormous mortgage. I agree with your point that it is unfair to allow two earning parents to claim, they will have to scrap that.

[DinahRod]

The govt is very likely going to get 1000s of public service workers to boost their own pensions in the govt review.

[TheCrackFox]

£850 a big mortgage? You couldn't buy a one bedroom flat in Edinburgh for that.

[greenfly]

If you think that is a normal mortgage then you really are completely out of touch.

[sanfairyann]

you can also reduce your income for tax credits purposes by taking into account donations to charity. we didn't know that and no doubt got less money than we could have done. also had no idea we could claim housing benefit when working. ah well. am definitely not missing any chance to reduce income this time round

[choufleur]

If you're just over the threshold you might be able to "buy" some extra holiday from your employer?

It's not fraud if you don't actually earn enough to not qualify for the benefit. It would fraud to claim for two children if you only had one for example, or claim single person council tax benefit if someone else lives in the house with you.

It's the same difference as tax avoidance and tax invasion imo. One is taking advantage of the system the other is defrauding it.

[TheCrackFox]

You could take unpaid parental leave.

[retiredgoth2]

We have six children between us, so about 5k of child benefit.

I've just gone back full time, so from the 2011-2012 tax year (including unsocial hours) I anticipate earning about 45k.

My partner is self employed and makes only a very small (sub 5k) profit, but loves the work and is fantastic at it.

So, if this proposal goes ahead, I will reduce from 37.5 hours a week to 30, thus keeping in the standard tax threshold. I figure that I will then be even financially, and have an extra day off a week...

I'm not sure that this was the intended effect..

[ChasingSquirrels]

yes, I think it is morally right.
The benefits we are talking about are not "designed to help those in greatest need", they go to a much larger population than that.
I am using part of that benefit to provide for my own future.
Others are using it to pay the mortgage or the rent.
Others are using it to eat.
Everyone had made different choices to get to where they are, and some have not had the opportunity to make those choices.

Personally I think the system is crap and that tax credits (not what this thread started about) go to far far too many people.

But, that is the system that the Labour government put in place, to continue to bolster the consumer society and to enable people to live beyond their, and the country's, needs.
Until the system is changed - which I think it should be - I am as entitled to the tax credits I get based on my income of £26k less my pension contributions of £3k as someone earning £23k in the same family dynamic would be.
I have no moral dilemma in that at all.

[vespasian]

So lower earners should support your decision to have six children and your partner playing at running a business.

[TheCrackFox]

Vespasian, maybe you would like to click on to Retiredgoth's profile? And then you could think about apologising afterwards?

[greenfly]

They 'go to a much larger population than that' but they were intended to help those in greatest need, like all benefits. You are using part of it to provide for your future. A child benefit? I certainly find that immoral.

[retiredgoth2]

I'm a widower who now has a new partner.

The total is six kids. I could have continued as a lone parent receiving widowed parent allowance, and my partner could have continued receiving full housing benefit. However we elected not to.

Oh. Two of the kids are autistic, too. And we both work full time and care for them.

So plainly we are scroungers, Vespasian. Yes.

I don't mind a benefit cut, as such. It's the lack of forethought and patent unfairness that troubles me. Tax it, instead. I'd willingly pay.

I just don't see the logic, given our family situation, of working an extra day a week effectively for nothing, whilst also paying for child care on that...

[ChasingSquirrels]

I honestly don't believe they were intended to help those in greatest need.
If that were the case why do families on £50k get tax credits.

You clearly do find it wrong.
I clearly don't.

[ChasingSquirrels]

to help ONLY those in greatest need.

I believe they were the Labour government buying another term in office.

[BelleDameSansMerci]

Squirrels thanks for clarifying the point earlier about when the tax threshold is set. I hadn't realised really how it works.

[mike1May]

I am amazed at some of the responses on this thread; the assumptions made; and the lack of generosity of spirit displayed by some people.

To everyone else - thanks for the replies.

[sincitylover]

greenfly - another not a well off single parent on a similar income to Lilac - in my case rent on a very small 3 bed house is #1380 pcm.

I struggle, no spare money left over and scrape around for food towards the end of the month.

I will also consider like Retired Goth working four days or paying more pension or similar.

I live in London and my work is only about four miles away - would be loathe to move too much further away and anyway any reduction in rent would be offset by travel.

[sincitylover]

think that the people who are really lining their pockets and safeguarding their at the taxpayers expenses are those bankers who will be receiving the enormous bonuses.