Waiting with baited breath! What will the chancellor do with CB on Wednesday.

[chickydoo]

Probably been done to death, but holding my breath to see what the budget will bring for child benefit on Weds? Will there be a U turn?
What do you think will happen?

The child benefit changes are th start, they have targeted those who earn over 60 k you watch as the years go by they will reduce and reduce this.

Work hard, earn high, pay lots of tax...get the least!

I'm all for supporting the less well off, really i am, that's a good thing about our society.

Child benefit has become unfair thats the issue.

As I understand it this isn't going to change the right to child benefit but rather make it taxable if received when the claimant or their partner earns over 50k. So all the rules around pension contributions remain the same and I imagine that is why the legislation is being brought in in the way it is - which is making the benefit taxable in certain circumstances rather than making somebody ineligible in those circumstances.

I could be wrong but that is certainly how it appears.

They are not making the benefit taxable.

That would be a simpler (and I think fairer) approach.

They are going to remove the total cash value (received by person A) through the tax allowance of either person A or person B

scaryT, looking at that document on the link (adjusted net income description) is not clear as you say if it includes property losses. If yourh alf of any trading loss on a second business can be deducted it would seem to be sensible that other losses such as on renting somewhere out at a loss could be included but I bet as it is going to be the same test as for age allowance or whatever there will be a lot of detail on its calculation for that other purpose.

"Adjusted net income is calculated in a series of steps. The starting point is ?net income? which is the total of the individual?s income subject to income tax less specified deductions, the most important of which are trading losses and payments made gross to pension schemes. This net income is then reduced by the grossed-up amount of the individual?s gift contributions and the grossed-up amount of the individual?s pension contributions which have received tax relief at source. The final step is to add back any relief for payments to trade unions or police organisations deducted in arriving at the individual?s net income. The result is the individual?s adjusted net income."

HMRC web site did not take me to any legislation which defines "specified deductions" but one must exist. If someone finds it paste it on here.

What is very clear is that just as I have never had tax credits as single parent of 5 supporting them alone I will now be taxed an amount which will equal the child benefit. I rather like the fact that I will still receive it however even if 100% of it then goes through the tax. I think I will keep claiming it but then they will confiscate 100% of it when they tax me.

no answers available for the pension question - it is possibly the most damaging issue to come out of the budget for mums but is being ignored!!!!!

eleiza your saying cap benefits but then still saying people earning 60,000 till need CB to help with their income

Which is infact twice the amount that benfits claiments are allowed to have

Now Either 26 thousand is enough to live on re the cap including Cb .So in that case why are people moaning that at 60 thousand they are not going to be able to live on it

It is answered in the HMRC link posted above - NI contributions still until your youngest reaches 12.

See section A8

"you should continue to complete claims for any new children even though you will not receive any Child Benefit payments for them. This is because for each week that you are entitled to Child Benefit you could qualify for National Insurance credits which can help to protect your future entitlement to State Pension. You can get credits if you are entitled to Child Benefit for children under the age of 12. This continues until your youngest child reaches the age of 12. "

That's to nikkiwort and others asking re pension / NI.

bb that seems right. I suspect even for people like I am with an income very much over £60k it does not harm just to keep your child benefit clam going even if you are sure 100% of it will be taken away in your tax later unless I suppose someone is worried about having it, spending it and not having set aside the tax they will later have to pay on it.

The other interseting one is cap on business losses. At present if say yo uhave a job on £60k a year and started a business at weekends which made losses then no matter how big those losses you can set them against your employed income or any other income. Now that will be limited. Secondly if you borrow for a new business you can set all the interest you are paying against your income and that is fair. Now that will be capped. I don't have any complex finances like this so none of it really affects me but it's interesting how it is going to work.

I see that tax was 4% in the Edwardian era. I wonder if we all think that the NHS and benefits (the main things tax goes on) are worth our paying say 47% tax/NI rather than 4%?

edithweston - not sure how that would work in practice? For me DP claims our CB - I am lucky enough to earn above the limit to get a tax allowance so they couldn't take it back off me - but DP is below the limit- would they get it off him?
No objection to not getting it - just confused as to how they intend to do it.
Xenia- i may be wrong but I didn't think you could ofset losses from a business on the tax paid on employment income anyway- the losses just roll forward
And i do think the 47% is basically worth it- education being the other big item paid for as well

Won't they claim the CB back through the tax code of the higher earner (whoever that is, regardless of who receives it)...?

xenia - totally think the 47% is worth it. Would I rather have no health service, education, pension, unemplyment benefits, bin collection etc etc etc~?

Life for the average person in Edwardian times was very hand-to-mouth - was reading Lark Rise to Candleford recently and she talks about oap's weeping for joy when the pension first came in.

tv, I think you can. You certainly used to be able to but that might have been changed. I have known a lot of people employed who start a new business at night and make say £2k a year losses on that they certainly could when I last checked set that against their other income on their tax return as you coudl losses from your letting business. It might have changed in the last few years but today's Times suggests this is one of the changes - an no need to panic as most people's losses areso small they are well under the new cap so thus no new change.

I am a tax purist. I woudl like one rate for all and no allowances to force people to contribute to things like pensions or new businesses. I think decisions should be made on the basis of whether you want a pension not because the nanny state is deciding it wants to try to persuade you by offering a tax advantage. The more complex allowances and reliefs which are abolished the better (and the lower a universal tax/NI rate might be).#

Let us aim perhaps not for the 4% Edwardiarn rate which most people did not pay at all as they did not earn enough but for say 10% as the aim with 20% for all as the intermediate aim.

'I see that tax was 4% in the Edwardian era. I wonder if we all think that the NHS and benefits (the main things tax goes on) are worth our paying say 47% tax/NI rather than 4%?'

Yes I do. Without them myself and one of my children would be dead. So would my mum. So would thousands who have car crashes, children with cancer. Not to mention the poor.
So yes.

God yes, the 47% is worth it. Forgetting all the other benefits, the thought that you would have to think about cost first when deciding whether or not to visit the doctor or have an operation, or even worse, make such a decision about your chiildren, appals me. I love the NHS, but then I have had to use it a lot and I expect that colours my view point.

'Work hard, earn high, pay lots of tax...get the least!'

So not true. Work hard, get house in a decent catchment area for a school that gives your child advantages
work hard, taxes pay for roads to drive your car on (many poor cant afford cars)
work hard, pay for the police force that keep your nice house and posessions safe (well, I might allow a rolly eye on that one)
word hard, pay taxes, you have an army to defend you
etc
Taxes benefit society. As well as the individual. I wonder if even high rate payers cover the costs of the hospitals, schools, roads, army, police they all use. Not to mention the safety net which awaits you if you get made redundant/become sick or disabled.

Two questions...

1, DH earns less than me and less than the £50k threshold. I earn more than the £60k threashold. so 'normally' we wouldn't be eligable. BUT what about while I'm on Mat leave and earning bugger all? Does this mean we'll be eligable for that year and then not after that?

2, When does this change come into effect? I assume it's from 1/4/2012 but can't see it written anywhere...

Think it comes into effect 7 January 2013.

Knitter - I think the answers are

1. yes, you would be entitled in the year you earn less than 50k. Will be complicated by the fact your mat leave unlikely to span a tax year though, but could be to your advantage as if it falls over 2 tax years and you earn less than 50k in each, then you could get child benefit for both years. You'd have to do this by submitting TRs I think though, which would be a pain as then you'd get in the whole self assessment system and would then probably need to do TRs for a few years afterwards. On the other hand, this may mean that you finally claim tax relief for things like your charity conts (like my DH, who will now need to do TRs to prove his pension conts etc will take him under 50k. Up till now he has never claimed the excess tax back on his charity conts as wasn't worth the palava!)

2. It comes in from 1/1/2013. Complicated huh?! And HMRC website clear as mud! Really daft, can't believe admin costs will be worth it for that 3 month period. Wouldn't be surprised if they do delay until 6/4/13.

Sorry louis is right, it's due to come in 7/1/13

Oooh - thanks clever people.

I go on Mat leave 23/5/2012 so it looks like I'll get it for the full 2012/13 tax year which is bl**dy handy. Will assume that we won't be getting it at all from 13/14 tax year though.

Those shouting about wanting a very low tax and about being "tax purists" assume they will always have good health and that somehow their lives are completely within their control.

They are not. Terminal illness, or serious illness which results in death or disability can strike you or your loved ones at any time, as I know from devastating personal experience.

That's why we have an NHS, state pensions, help for people with disabilities etc. It isn't a perfect system, but these "I'm all right jack, so you can fuck off" people's lack of compassion for others is sickening, and a sign of the times, unfortunately.

Xenia the calculation of Adjusted Net Income does take into account business losses, but losses from most rental properties are not treated as business losses and can only be carried forward for set off against future profits from the same property. The exception is mainly for furnished holiday lettings and the like - more details here.

2) It comes in from 1/1/2013. Complicated huh?! And HMRC website clear as mud! Really daft, can't believe admin costs will be worth it for that 3 month period. Wouldn't be surprised if they do delay until 6/4/13.

I imagine they want to get it into peoples tax codes for 2013/14 so need to do the assessment based on 2012/13 and 7 January is probably the earliest they can do it.