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.

[sincitylover]

their future

[blijemuts]

My husband will also reduce his hours or employ me for a very small annual wage to dip his income by a few hundred pounds to avoid losing CB. We are SO close to the limit and already on an extremely tight budget that we think that would be justifiable. Am at peace with losing Family Working Tax Credit or whatever it's precise name is but really need to keep hold of child benefit.

[Tootlesmummy]

Vespasian, do you feel the same about low paid people who have lots of children and expect the higher paid to pay for their upkeep?

[vespasian]

Yes I do Tootles. If people are on benefits because of a disability they are like anyone else entitled to have children, within in reason I would say up to two.

If don't think anyone should have more han 2 children that they can't pay for themselves, ( usual disclaimer about someone who used to be a millionaire but then lost it all - they should not have to give their kids up or send them up chimneys to pay for food)

I am a HRT, I can at present only afford one child. I have one. I am working damned hard to get myself into a position to have two.

[Tootlesmummy]

That's ok, I've read numerous posts this last couples of days where people are saying that HRT payers should only have as many children as they can afford but forget to say those on benefits (usual disclaimer as you say!) should also adhere to the same rules!
I too am a HRT and I only have one child as that's all I can afford.

I agree the government need to do something re the debt the country has and I would accept this but the fact they're going to introduce it in a half arsed way I am not at all surprised that people are looking to see if they can continue to get it.

if they sorted out the discrepancies then I think (or maybe hope!) that others would be less likely to look at ways to get around it.

[vespasian]

I didn't know retired goths background, I am not someone who looks at profiles. I don't have one myself.

I apologise for offendeding you. I posted based on what you have typed. I don;t understand if he works full time and only earns 5K, could he not do something else? I honestly don't mean to offend at all, I just don't understand and am clearly missing something.

[catinthehat2]

Or see if you can buy a day's holiday for £200 to get you under the HRT threshold.

It's going to happen.

[retiredgoth2]

I see in retrospect how what I wrote could be misconstrued..

So apology accepted and offered in return.

Ye, ultimately my partner could do a range of well paid professional jobs if she chose. She has done it unhappily in the past. She chooses to be a happy psychotherapist instead. It is, I accept, a choice.

And I am not pleading poverty. I just don't see the logic in the bluntness of this change. The imperative created is a counter productive one..

...because, as it stands, it presents me with a choice. I can work 30 hours a week and receive a (very good I accept) total of 45k. Or I could work 37.5 hours and receive the same.

I had thought the benefit changes were intended to encourage work..

[vespasian]

Thankyou retiredgoth for being gracious in accepting my apology.

I can see how the plan to encourage people to work may backfire. Ironically it may encourage "Britain's hardworkers" as we love to call them to start working a little less.

I am overworked, tired and frustrated with broodiness, it can make me a bitch sometimes.

[crox]

The key here should be fairness or equlity.

It is patently unfair for a family where the only income is earned by someone who earns just over the threshold losing out where as
a two income family can earn almost double the threshold and still claim.

I will certainly be looking into salary sacrifice as my hope is for my children to go into further education and this money would have helped them, as by the time they get there lord knows how expensive it will be

[2shoeprintsintheblood]

i wonder if the people on this thread who think the op is ok, are the same one who slag of benefit cheats

[lucky1979]

Retiredgoth2 - If you don't work those extra 7.5 hours, would your company have to hire someone else to do it? If so you can feel virtuous about getting someone else into part time work. :)

[bethanbach]

Aren't they lowering the Higher tax threshold to 38K anyway so unfortunately OP, you will still lose CB

[legostuckinmyhoover]

does anyone know about pension contributions and teachers or NHS staff in relation to tax credits? ie: do tax credits ignore what they contribute to their pensions? or is just if you pay into private pensions? just wondered as i have never heard of any of the things on this thread ever before! thanks

[fsmail]

Salary sacrifice means that you are giving up your salary and reducing it for tax purposes so if it brings your DH below the higher rate tax bracket this will work. However, higher rate tax payers will be restricted on childcare vouchers from April so need to do it before 2013. They can be stored up to pay for holiday clubs though. I intend to increase my pension contributions as I am just over the threshold.

[fsmail]

You can also buy extra holidays if your Company will allow it. Pension contributions do not have to be reduced by salary sacrifice to reduce your taxable income.

[zombishambles]

Whats the restriction on the vouchers from April fsmail?

[fsmail]

Higher rate tax payers will not get 40% tax relief unless they take them out before April 2011.

www.moneysavingexpert.com/news/health/2009/12/government-shelves-plans-to-scrap-childcare-voucher-tax-relief

[zombishambles]

So I need to swap them from me to dh- you can only do that at the end of the year anyway though cant you which presumably will be after the cutoff? childcare vouchers confuse me...though am hiding it well I know

[fsmail]

You can do it anytime if your company allows.

[zombishambles]

Mine locks you in for a year. Though dh can take some out as well cant he or can you only use one lot per child

[fsmail]

You can both take up to £243 per annum no matter how many children you have.