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?

@bigbadbarry no, you are only trapped if you fit the following:
? a married couple living together;
? civil partners living together;
? a man and a woman who are not married to each other but who are living together; or
? a man living with a man or a woman living with a woman who are living together as if they were civil partners.

The unfair step is still there - it's just that family A on £100k per year will keep it, but family B on £60k will lose it.

This proposal is as much of an unfair mess as it ever was.

It was never sensible because first it breaches the very important principle of separate taxation of husband and wife which was very very long fought. Unless you are claiming state benefits you do not need to tell your husband that you earn or he know that if you don't want to or even if you get child benefit. That is swept away. Only of course in a minor way but it's bad.

Secondly universal benefits work well and ensure the middle classes buy into the welfare state. They are cheap to administer. There used to be a child tax allowance before child benefit came in. It has alawys been recognised that children are what the state wants and that it's expensive however rich you are to bring them up. That has gone.

In general I woudl want to be rid of every benefit in the country, have low tax rates 10 or 20%, much less of a state about and perhaps jsut one universal benefit paid to everyone whether they work or not at the same rate if they are over 18. So in principle if we get rid of benefits and ultimately tax credits too which I've never been eligible for and all the other complications and distortions things will be simpler and better and people will tax decisions not based on tax effect but on the matter itself. Eg if you want a pension you save for one but you don't need any tax relief for that. If your tax rate were 20% (merged tax and NI if that could be the rate if the state does a lot less) you would have more money to pay into a pension and if you chose not to then that's fine too but giving you the right to put in £50k a year which I think can be added up if you miss years is a distortion.

bugger it - if i split up with hubby, take the kids and go live in my flat and draw all the benefits i can get then maybe I will get a pension and be seen as a person in my own right instead of part of someone who should be giving me half his income but doesn't!!! If only I had a lack of morals and was a greedy scrounger!!!!!!!

If you have 2 earners on 50k, they will pay more tax than one at 60k, so I dont see the unfairness in them getting CB. That said, I would rather see it scraped, paid to lowest income households in other benefits so they dont lose out and to speed up the processing of benefits.

Wasabi, that's a really weird argument. Based on your logic then, millionaire banker/footballers pay even more tax than the hypothetical 2x£50k earners so therefore they are way more entitled to CB than the family on £60k yes?

The problem isn't whether higher earners can/cannot live without CB but rather the perverse way in which it is implemented.

Can you imagine if they tried this the other way around? So let's say for example the govt said "OK, we'll cut tax credits if one earner earns more than £15k."

The rich already pay the vast majority of tax revenues yet take out the least. It's a fact of the welfare state that those who need it the most, contribute the least. Not a problem except when the rich, the very people who are funding most of it are continually being pilloried and demonised for not doing enough. How would you feel at work if you put in the longest hours, contributed the most to all the projects yet continually told by those who do less that you are not doing enough? Would it piss you off too?

niceguy a few of us do support that view. I would argue weveryone should pay a flat tax of say 20% and that is capped so no one pays more than say £50k or £100k a year or whatever we can afford when we have radically cut back the state and what it provides. That is fair - that you pay your due and 100% of what you earn over that level you keep. I don't agree that the more you earn the more you should keep on paying.

Xenia, I know we're digressing a little but personally speaking I'm in favour of a flat rate tax system as well but without cap.

Personally speaking I think it's much fairer that everyone pays the same proportion of their income with the added safeguard of a decent tax free allowance (eg. £15k). I sincerely wish our tax rate (IT & NI) could be flattened and lowered to 20% but i fear it couldn't be because of all our current spending commitments.

One of my hopes is that this personal tax statement will help people understand where their money is going and that in future when any government announces more spending on xyz that people will pause and think "Is this good value for money?"

Clearly the planned removal of CB as a universal benefit has triggered a discussion of many very valid concerns and points of view . It is clearly unpopular with some households who will see higher earning households keep it , concern about SAHM pensions etc
Does anyone know how much the government will save financially ?
Do they ? and is it worth it bearing in mind the additional HMRC admin they might require , increased tax returns to process and potential loss of voters .

'people will pause and think "Is this good value for money?"

That would be good.

However, I can see some people doing that, and some people using it as a whip to beat people with- the DM has been quite pro-disability this year (!!!) but I am sure there are media (NI) who would love that 'YOU are paying this to scroungers' headline.

it won't after all distinguish between paying housing for someone not working becuase they spent 20 years in priosn for paedophilia and housing for someone with a disability; it won't say whether ESA is going on someone who has autism or a bout of what dad calls 'lazyitis'. And as the percentages won;t be there, it will give people th power to twist figures to suit their agenda, any agenda they may have

Interesting Xenia about a same amount for every person in teh country.

We've argues before about how that might affect pricing- if every person gets say £200 PW either before wages or not, then what housing etc will be affordable for someone without wages, for example

But also personally I don't think I, as someone with no illness or disabilities that need any great input, should receive the same amount as someone with a disability who needs adaptations and care, or equipment just to live their lives in any real way.

niceguy - i dont really explain that very well..... means testing on household income needs to be avoided because of the cost, so your always going to be looking at a fudge.

2 earners at 50k pay a total of app 28k pa & continue to get CB.
1 earner at 60k pays 19k, so the household contributes less to the state & gets less back.

its certainly not perfect but another angle on the cries of 'its not fair blah blah blah'

What a load of hysteria on this thread - literally laughed out loud at the suggestion of 'boffinmum as PM!
Suggestions that people would split up over this issue and people basing their decision on whether to have a third child on the CD ( just show how far the lunacy has gone - C sould be phased out completely - ie let them who have it now keep it, but as from 9 months from now just stop it.

If you are looking at 2 earners vs 1 earner a fairer comparison would be:

2 earners @ £50k each so total income of £100k pay total £28,442 in tax and NI and still get CB.
1 earner @ £100k pays total £35,221 in tax and NI and doesn't get CB.

So single earners are already at a big disadvantage - this is an inevitable feature of a progressive tax system based on individual, rather than family, income.

the 2 earners are likely to pay for childcare so contrubting to a third person's employment.

like i said it is a fudge, i just dont think it is cut and dried unfair.

Well accountants are going to win in this situation as more people will need one.
I have no idea how much I will end up with on this basis.

• DH pension & childcare vouchers coming off
• My giftaid contributions/childcare vouchers coming off
• Our business losses from rentals - can these be offset?
• Does DLA count as income?
• What about car allowances/variable bonuses

Are any MNers accountants in the Notts area and want some business...?

My guesses would be

Pension will be allowable deduction
Childcare vouchers - not sure but I think unlikely?
Dla is not taxable so would doubt classes as income for child benefit purposes
Bonuses / car allowances taxable so almost 100% sure they will count as income
Rental losses - cant be offset against income tax bill so unlikely will be able to offset against income for child benefit purposes - unless furnished holiday let which is different rules. Imagine rental income will count though!

As I say only guesses but I do work in this area..!

Thanks Spammer - a bit clearer
Will be worse off though...

Well accountants are going to win in this situation as more people will need one.

- Our business losses from rentals - can these be offset?
Only if they are currently offset in your tax return which is only likely to be the case if they are from qualifying furnished holiday lettings.

- Does DLA count as income?
Not for this purpose

- What about car allowances/variable bonuses
Anything paid through payroll or appearing on a P11D counts.

Are any MNers accountants in the Notts area and want some business...?
Not in the Notts area but you'd be surprised how well remote working works

Just to be clear, the figure that counts is called by HMRC your Adjusted Net Income.

This is basically* the Net Income on your P60, plus benefits shown on your P11D, plus all other sources of income except certain benefits and gambling winnings, less pension contributions, gift aid, qualifying business losses (which does not include most losses from property) and allowable expenses (such as certain professional subscriptions, unpaid/underpaid business mileage etc.)

This figure is already used to calculate your tax liability so there is nothing new or special about it.

• this expanation is necessarily simplified and doesn't take into account things like overseas income etc.

... so to be absolutely clear, Childcare Vouchers (as long as they are paid according to the qualifying rules as amended in April 2011) are not included in your Adjusted Net Income.

Mr Anchovy, my dh earns £50,000 BEFORE TAX sounds alot but we will slowly lose the CB gradually and this is the only benefit we get.

I work 5 hours a week earning £6.65 ph as a dinner lady at the moment and as a childminder with no children to kind at present as no-one seems to want cms, cannot afford to go out to work full-time as I cannot afford childcare and I have no relatives to help.

AIBU to want a bit of help in CB for my youngest who starts high school in a year's time, looks like we will need to take out a second mortgage for the amount of stuff he will need as well as his uniform and food everyday .

I feel my dh pays enough tax out, why can't we have s omething in return?

I suppose it is simply that labour spent all the money and got us into debt and left us with this massive problem. Could you not work all day Saturday and Sunday if your husband is there then so that you don't have childcare to pay for work work in the night? I have often worked in the night and that works pretty well with children.

Mum2Luke, if your DH earns £50k and you returned to work you could easily afford between you the childcare costs of one preschooler. You may not want to but thats a whole different ball game.

Like Xenia says, you can always work nights and weekends and your eldest (16) should be more than capable of helping out for pocket money with a 13 year old and a 3 year old.