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?

Xenia: "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."

This may be possible, but HMRC can contest that the weekend activity is not actually a business.

If anyone on over £50k wants to keep all their CB the obvious route to reduce taxable income is pension contributions rather than throwing money down the drain on something that will never make money

I haven't read all the previous posts (14 pages in total) but while I don't think high earners (above 60,000 annual income) should have child benefit, I think this should be calculated according to individual earners, not the entire household - ie if the dad earns 60,000 but the mum is a SAHM with little or no income, she can get the child benefit. That's because if something happens to the main breadwinner - death/divorce/separation/critical illness/disability/unemployment, one parent can still get the benefit and look after the children - it can take many months to prove, for example, that a separating parent is not giving the main carer an income - eg a husband leaving his wife might still co-own the property or live in it some of the time and pay his council tax but he may be freezing his wife's income/finances if they have a joint account or if he used to give her an allowance.

Perhaps the income threshold can also be tiered according to number of children - if a single mother or father were raising 4 children on a £60,100 pre tax income and living in an area where accommodation and transport costs (to school and work) were very high, that could potentially be not much funds to go around, compared to a household with one child on the same income. But I don't think we should scrap child benefit altogether - child poverty can lead to higher rates of illiteracy, unemployment, drug/alcohol issues, crime, mental and health problems (bigger bill for taxpayer/NHS) - child benefit is not paid to benefit the parents, it's to benefit the child. So the argument about "if you can't afford kids you should not have them" doesn't wash - a baby born into poverty/deprivation was not responsible for his/her parents' contraceptive or reproductive choices.

Sorry - second line should read "should NEED child benefit"

Mr A - the guidance note said 'trading losses' - not entirely clear if that includes losses from letting out a property. They need to provide more guidance.

kipperandtiger I think you have missed that the responsible parent continues to get CB and the highest earner has to pay it back through their tax return so in all those cases there will be no change for the mother from the current situation.

This is interesting

blogs.telegraph.co.uk/finance/ianmcowie/100015821/budget-2012-why-400000-parents-will-pay-higher-marginal-tax-rates-than-millionaires/

MrA; the point is that it is a retrograde step to tax my dh on income that I receive. I have a tax allowance all of my very own against which to offset the cb if they wish to tax it. If they want to play this game, then bloody well make my tax allowance transferable. We will be back to the days of my refund being offset against his underpayments again. We have independent taxation, and this drives a coach and a whole team of horses through it.

Trading Losses is an abbreviation for losses from a "Trade, Profession or Vocation" which is a well understood concept of taxation. Property Income is not (except for limited exceptions as mentioned) income from a "Trade Profession or Vocation".

Yes I agree scaryteacher that is interesting, however noone seems to care that since the withdrawal of the Personal Allowance for those earning over £100,000 there is already a marginal tax rate of 62% for those with taxable income between £100,000 and £116,210 anyway.

Yes, I do care (though we are not at that level of income). It's getting to be punitive at the moment.

Thanks MrAnchovy - didn't have time to read the CB bit yet, all the radio keeps talking about is the "granny tax"! The paper is waiting for me to start reading it....I know I should be more anxious about it, but there are so many changes nowadays that I refuse to get anxious any more....but the rise in income tax threshold does help us! I was just posting the point on a philosophical level - every time I hear someone saying that childless people should not "subsidise" people who choose the "luxury" of having children, I feel I have to say something! (even though I was childless for very many years, I never begrudged others for having child benefit). Many other industrialised countries do some version of child benefit too - whether it's a lump sum, tax breaks, etc.

Responding to a query several pages back, it is my understanding that anyone who contributes to a child's upkeep can claim child benefit, but it can only be paid to one person. If you have two children and are separated from their father, it must in some cases be better for you to claim for one each?

I am confused, does this still mean if one earns over £50,000 the SAHM loses the CB yet if two earn the £50,000 (total £100,000) they get to keep it?

Am not looking forward to fuel duty rises in August, means I won't be able to even afford to see my family. Have already cut down on car useage due to high diesel costs. Does this government like to split families who do not live near each other?

I wonder?

Responding to a query several pages back, it is my understanding that anyone who contributes to a child's upkeep can claim child benefit, but it can only be paid to one person. If you have two children and are separated from their father, it must in some cases be better for you to claim for one each?

In theory this may be possible, but I think in practice if both children lived with you then the Child Benefit Office would refuse the claim by the father, or restrict it to the additional child rate.

I am confused, does this still mean if one earns over £50,000 the SAHM loses the CB yet if two earn the £50,000 (total £100,000) they get to keep it?

Yes. Or rather if one earns over £50,000, that one starts to repay CB so that by the time they earn over £60,000 they repay it all. It is impossible to arrange this any other way without spending hundreds of millions of pounds administering it.

So mranchovy if I live with a man... but he is not father to my child... can I claim CB for my DD based on my salary?

That would certainly stop all the moaning and frothing I've been doing these past 24 hours

Oh, okay - I re-read... seems like my frothing may resume

You can still claim CB whatever happens. But if you live with a man (or a woman who is your partner) and he earns more than £50,000, he will have to pay some of that CB back.

I don't understand [thick emoticon]

Well if you claim it and your partner earns over 50k, then your partner should complete a tax return where they will be asked if anyone in their household claims child benefit. If the answer is yes you have claimed it, then this will be taken into account when they calculate the tax your partner owes (so if for example you claimed £2,000 of child benefit and your partner earns £70k, they will have to pay the £2000 back as part of the calculation).

Yes your partner could lie - but they could lie about everything on there as it's self assessment. The way you'd be found out is if they held an enquiry into your partner's tax return (something you wouldn't want!). Whilst HMRC talk about selecting a sample of returns to enquire into, there are certain flags that trigger enquiries - one would certainly be where someone has said no, noone claims it when HMRC's records show otherwise.

I'm guessing anyone in the critical income bracket will get asked to file a return, whether they have children or not.

MrAnchovy not that it applies to me but I am very curious to know what happens if you live with other generations - say grandma earns above 60k? re they defining "a household" as a nuclear family?

There is a very clear definition of who counts in the household - civil partner, partner, spouse. It does not include rich granny or if you share a house as two women not in a relationship I think who are just friends or 8 people who live in a commune but aren't in a relationship I think.

So a Muslim man living with 3 wives for example where any of those 4 people earn over £60k that family would not get child benefit.

If you kick your rich boyfriend out of bed every night at midnight to live elsewhere then you would retain the child benefit etc etc

Edith it will be a tax charge not a reduction in personal allowance.

Sorry, I did phrase it badly. The adjustment of course is in your tax code (which is essentially the personal allowance plus or minus any adjustments that need to be made).

Just throwing this out there...
I think CB should be capped. After a certain amount of children in the family (and I would say 3), it should stop no matter what the income. Surely after three children you know if you can afford a fouth fifth or sixth baby. The amount of families living on welfare is shocking. Some Mums are just popping them out every year and anyone but them is footing the bill.
Flame me I don't care, I would really like to see this happen.

That should be large families living on welfare