I must be exceptionally dim - child benefit

[people]

OK, so now instead of one earner in a household earning more than £40k to be excluded from child benefit, it's £50K.

So, that means that some households will have £98K income and still qualify and others with £51k won't qualify.

IMO it's quite right that those on £51k (or £41k) don't qualify, but it doesn't seem fair that those on £98K do (I know been done loads before, I am getting to the point)

What I don't understand is why it's assessed on individual rather than household income? Tax credits are based on the household, so we know it's possible.

They can't afford to assess that many family's joint income (which will go up and down depending on promotions, hours worked, etc). The single income method can be triggered automatically by the tax system, although I pressume women will have to declare their DP's earnings? It is a stupid and unfair hotchpotch of a policy that penalises single parents and SAHMs imho. But slightly less unfair after today's amendments.

I guess the argument would be that the household with one 'high' earner could afford for the other partner to stay at home without too much of a drop in income, so avoiding childcare costs. Whereas with two lower but more equally matched earners it might not be possible.

Not that it's always that simple in real life, of course. And isn't very helpful to single parents...

They CAN and DO assess household income - have done for years for tax credits.
But politicians are arses.

If they were proposing it would be on household income, that would be significantly fairer than the total mess that is this proposal (even in the amended form).

But they're not - it's still got unfair thresholds, and is going to be ever more expensive to administer. And they are still totally silent on the vitally important issue of the NI component of CB.

I still can't see how they can legally tax dh on what is effectively my income, which is what they are doing. He could claim that he doesn't know if I get cb, and I could claim that I don't know if he's an HRT or not. As we are not jointly taxed, how can they tell without breaching data protection?

scary
you did not think they had actually thought it through did you?
and with three weeks to go !

Absolutely agree with scaryteacher. How does HMRC know about my existence unless they go into past records? Or am I mixing up my tax offices?

If you get child benefit you have an NI number.

HMRC can track the whole of your NI history, linked to your address
that shows them all P60s
P45s
benefits
Child benefit
SSP
SMP

and as its by HOUSEHOLD not spouse, if there is a higher rate taxpayer at the same address as a child getting CB .....

I'm confused.

One parent will apply for CB and will obviously have to declare their DP's salary in order to know if they qualify. Therefore the powers that be will know the household income?

Or am I equally as dopey?

It's taper relief so you could earn up to £60,000 and still get some CB. Barking mad to think that you could be on a joint income of £119,999 and still get some CB or joint income of £98,000 and get full CB. And yet those of us single parents on good salaries (but way less than 98) won't get a penny.

Petrean
I suspect that every child will still get CB from birth - the forms are presumably still part of the Maternity pack.
BUT
HMRC will check the household and reduce the tax coding on any individual on over £50k in the household - to the total value of the child benefit

an arse about face way of doing it but actually simpler to implement and check

'HMRC can track the whole of your NI history, linked to your address'

However, under data protection they presumably aren't allowed to link my NINO with dh's, as it's my NINO that cb is claimed under not his. How would they link us? No other benefits here other than cb.

They are not/not making it a household benefit (if they were, the unfair "step" would never have arisen).

It is an allowance paid to one individual, because of which another individual might have their tax rate varied. This is a breach of the principles of independence in financial and tax affairs.

It would be a different (and better) proposal if it were based on total, joint household income.

'HMRC will check the household and reduce the tax coding on any individual on over £50k in the household - to the total value of the child benefit'

But how? We have independent taxation and independent NI. When I claimed contributions based JSA post PGCE, I didn't give any of dh's details as they weren't relevant; the claim was based on my contributions, not his.

How is household income assessed for tax credits, I can't remember? Presumably both parties have to declare their NINOs and jointly claim?

scary
NO.
HMRC are pretty much exempt from data protection as they (and the DSS) are allowed to say that all of their data cross linking is related to legal compliance.

They cross reference HMRC, DSS, Dfee, Land Registry (eg catching BTL landlords), Births,marriages&deaths etc etc
there is a HUGE "data consolidation" project ongoing.

My husband is self employed so he does not know what his income will be until end of financial year. How does it work in this situation. I'm a sahm.

and isn't child benefit administered by Inland Revenue rather than HMRC? Think these are separate entities.

it will be based on his SA returns
same as tax credits have been for years for we self employed
and if he's SA he can get his accountant to make darned sure his taxable income stays below the limit !

Obama
Inland Revenue is part of HMRC - has been for years.

'HMRC are pretty much exempt from data protection' They shouldn't be. My tax affairs should be entirely separate from dh's, as we have independent taxation.

scary
but we do not have a separate tax credits or benefits - both of which are on household income
also HMRC need to check against land registry and electoral role for primary and secondary addresses for CGT
they cannot do their job without data mining.

When you apply for tax credits or certain benefits, you do so on the basis of it being a household claim. It is explicit in the forms, and by filling them in you both consent to your details being verified.

Capital gains tax is not household based.

And nor is CB. And this proposal does not make it so - if it did, a household with 2 x £30k earners would also lose it totally

There is an answer on the NI contributions on the HMRC website. Basically you still claim and you get the contributions even if they clawback all the CB from your partner's income. Of course if you're married to an abusive partner who won't allow you to claim because they don't want to bear the tax charge your pension will be screwed as well. That doesn't seem to have occurred to George...........

What I wonder is what will happen if a CB claimant simply refuses to tell their HR tax paying partner if they claim CB or not. Are HMRC really going to check every SA form to make sure the declaration is accurate?

And if they do will the taxpayer be liable to penalties for a false declaration even if they had been mis-informed? CB claimant can't be obliged to tell the truth surely?