Tax changes - are you better or worse off ?

[throckenholt]

Just listening on the news that only the top 20% will be worse off. I had never realised before that I am that well off to be honest !

I think we will be about £250 worse off if the online predictor things are right - we have 3 kids, 1.3 FTE salary (both work part time) with a middling salary (average about 40-45K between us). I think the money we will lose will be from falling off the top of the child tax credit limit (just).

I don't particularly expect handouts from the govt at my level of income, but I was surprised that our income puts us as high as the top 20% - I would have thought a bit above the middle. There must be a very long tail stretching out to the high earners.

It made me wonder roughly how many others are similarly unaware that they are classed as the wealthiest 20%.

I highly doubt the rest of the country would be subsiding those in London. Most employers add a weighting to salaries recognise the additional cost of living in London, therefore these employees earn more but pay more in tax %wise compared to those working outside of London. In addition, most Londoners pay more stamp duty when purchasing a home as house prices are much higher compared to the rest of the country.

There are loopholes that need tightening up in the UK. I would start by changing the law so the gain on the sale of a primary residence is tax free up to GBP250k but you have to have owned and used the property as your primary residence for the prior three years to qualify for this break. Obv MPs are not going to fight for that change as they have been benefiting from the current set up. After that I would disallow the favourable tax treatment of foreign workers here on secondment. I was flabbergasted that my tenant is able to deduct her rent from salary and pay tax on the balance while I, as a resident, was always taxed on my gross income.

noodles - While you might not get help with rent and council tax your credit is worth GBP1820 per year and your child benefit is worth around GBP1900 a year. This benefit is the equivalent of you earning GBP5,470.58 before tax. I am not saying you shouldn't get this help but I do think it should be included when calculating 'average' income and this amount should be shown as your benefit which you then pay tax on. I know it ends up being a wash but it makes income numbers more transparent.

According to te calculator we'd be £500 better off, but as a nurse earning about 20k and my partner earning 12k it not really surprising!!!

With changes within payment of fuel etc at work I will probably end up being worse off :(

We have always been careful with money and living in the SE it doesn't go far but if you look at your income and budget to it then it is possible to live comfortably. We haven't had a foreign holiday for a couple of years but prefer to enjoy regular camping holidays at a lot less cost and as much enjoyment!!

I hate to hear people moan when really they are well off in comparison to a lot of people; I don't believe that that means you should be penalised and pay for those who really are work-shy but for some people it is not easy to get a job that pays the sort of money that pays well.

We will struggle a bit financially this year. We are about to have our first child. If she had been due a year (or in some cases a month) earlier we would have been entitled to about £1k of govt help in tax credits etc which is now gone. We will be living off DH's salary of about £23 plus SMP for me until I go back to work. We both have 'professional' jobs and have degrees, and live in the SE. But, we wouldn't have planned this child if we couldn't pay for its support. And while we will struggle a little, we will be able to budget and we will be OK. To be honest I don't really think that we will be in need, or deserving of state help. It would have been nice, but not needed. And benefits should be for those who need them.

I really don't understand those people complaining about choices they have made. It fine to say poor me, I have a large mortgage/several children/live in the SE etc but those are things that you chose to do. You could move to Bolton and buy a family house for the same price as a small 2 bed terrace in the SE. You could give up work and just go on benefits - (after all its an easy life isn't it?) but you don't want to.
People should stop whinging about their choices. If you don't like something about your life, then change it. But complaining that on £45k or 65k that your tax credits have been cut is fairly insensitive to the majority of people who earn FAR less than that and are just getting on with it.

Want2BeSupermum - How is CB 1900 a year? Thats a lot. We only get £970? Our whole income together is £24292 I have just worked out. That is for working 70 hours a week. I still am going to be over £400 worse off, but I am not that bothered as everyone is in the same boat so no point in worrying about it.

I pay a huge mortgage in comparison to my income (40%) but thats my choice to do that because I dont want to move areas as I live in the South so Im not going to moan about it. Just got to get on with it until its paid down a bit. I agree with vj32.

vj32 if only it were that simple to just move. I could get a job up north and have a better quality of life. However the tax on mobility known as stamp duty plus all other associated costs of selling and moving means it's not an easy option.

It depends what you want to live in you can get 3/4 bed ex council up north near some of my family for 62k. I bet if you really wanted you could move from where you are to that Iggly.

Live in Sotland, two adults, two pre school age children. DH 40+hrs PW £25500 Gross PA. Me 12hrs PW £12000 Gross PA (£37500)

We work out £480 PA better off with NI/Tax but lose £730 PA tax credits
I have a pay freeze and am waiting for the higher pension contributions to start.

So far £- 250 and we had already lost £400 PM due to cuts in DH weekly wage and previous reduction in tax credits.

So far since this crap started we will have lost £5250 PA

We don't drink or smoke, rarely go for a meal ...maybe twice per year. I work weekends so we don't pay childcare as we couldn't afford it. We have one car.

Stamp Duty is only a tax on buying a house, not selling one. You could buy something for under 125K and not pay anything, also this amount is exempt.

I will soon be a single woman with no dependents. I don't need a 3 bed house and am considering downgarding to a smaller place in the nearest and cheaper town as I'm fed up paying a mortgage. Will miss living in the village but choices and all that!

We moved for a better quality of life.

From a very expensive place to a very rural, very cheap (in terms of housing) place to live. DH is on same (very average) salary but we now live in a much bigger house in a lovely area and are mortgage free.

Best move we ever made.

Ihavebeencreditcrunched - I don't understand why you going to lose tax credits, we are in roughly the same position as you and ours will remain the same - unless I'm missing something

I must be doing that online calculator wrong as it says we would be better off if I gave up work?

This may have just swung my discussion with dh in my favour about not returning to work after maternity leave

Due to go back anytime between now and July - might as well not bother and be a little richer too :)

I think next year if you earn over £25k you will dramatically lose tax credits so I'd factor that into your calculations cherrypie3

Definitely not me doing it wrong. Have just done it several more times and got the same figures.

Doesn't even make sense. It's like an incentive not to work.

Don't get me wrong...I want be a SAHM for the time being, until my children are all at school - I just never expected being wealthier for doing so!

Aaah thank you MrsOtter, dh earns £30k + any bonus he achieves.

I would be earning around £9k for part-time work.

If the tax credits are being reduced, might have to just stay at home until then, then phase back into work. Hmmmm.....

God I wish I understood all this!

Thats just this year 2011-2012, after april 2012 there are more changes to tax credits and less people will recieve them.

I can't work out how much we will get but think we will pretty much lose them (household income of £37k gross)

I know its so confusing - I ust want a claculator for 2012 -2013 so I know where we stand but can't find one any where

I bet we lose them too, it wouldn't even help if I called tax credits cos they won't even know yet will they.

Sneaky govt people!

I have to phone them in a minute to update our claim so will ask them!

I think the lack of information is crazy.

If people knew they were going to be significantly worse off next April they could start planning for that now. Both by budgeting accordingly and looking at ways to get back in to work or increase hours.

All this uncertainty makes people like me less willing to spend which is precisely what the government don't want. They're relying on consumer spending to keep the economy afloat. Stupid, stupid Tories.

They claim they're cleaning up labours mess tho?

Think I might still vote labour in may. Even if they did leave a massive debt.

I take home about £2000. Yes that is a lot of money and I am very grateful and enjoy my job.
My half of the outgoings each month are: nursery £400, mortgage £700, food £60pw, diesel £75 pw and elec, water, gas council tax £120pm. This leaves £240pm for phones, 'non essentials' like contact lenses, dentists etc.

I save a little - £35pm into a pension and a little more - £35 into DCs account. I don't think that is very much for our futures.

So after all that I have a disposable income each month of around £170 to cover mobile phone, hair, eyes, clothes and shoes for DC, and anything I actually like to buy for myself or DC having worked all month. It feels as if this does not go very far.

I don't feel very well off, but I am lucky that I have a job and that I do not have to live beyond my means. I am careful with money but i am humbled when I read on here about what some poeple earn and manage on.

I do not want pay outs and I expect to work for my money and lifestyle. But no I am not in the top 20% of this country.

I would be about £30 better off. Our family wage is about 35K. It makes trying for promotion, or any sort of striving a waste of time.

CherryPie - The recession was global, not just UK, so they can claim they're cleaning up Labour's mess all they want, it's not true.

The cuts they're making are too fast, too deep and based on ideology.

I would be about £30 better off. Our family wage is about 35K. It makes trying for promotion, or any sort of striving a waste of time.

I think it is going to become increasingly common where people move up a yearly increment on a pay scale (ie a pay rise of about £500 pa) and they then leap into the next band and pay more tax, lose benefits etc and end up a lot worse off. I wonder if you can ask your employers to save up your increments for a year or two so that you can then jump up 2 or 3 points and at least break even ? Doubt it.