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Original poster

I must be exceptionally dim - child benefit

63 replies

people · 21/03/2012 14:02

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.

OP posts:
scaryteacher · 21/03/2012 19:53

'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.'

As we don't claim either tax credits or benefits (apart from cb), they have no way of knowing our household income, as our tax offices are separate.

They have no reason to check Land registry in my case, and as for electoral roll, why would they check that without us having a CGT liability?

scaryteacher · 21/03/2012 19:54

Oranges, I'm tempted to see what happens.....

ilovemydogandMrObama · 21/03/2012 20:16

talkin I just can't believe that all of the cross indexing etc will be instead of people applying. Sure, it will be used as verification, but can't imagine that there is anywhere near the capability to cross people on or off a list quite in addition to the fact that people will have to make a legal declaration. This cannot be done by someone else. Even when Working Tax credits were withdrawn, one had to declare the income as stated was correct.

TalkinPeace2 · 21/03/2012 20:18

scary
HMRC do not use the tax offices for their data any more - when I use online submission they all default to office 1 - it is a single database. They will / have already link you

oranges
they will use data matching - it auto checks thousands of returns at a time
so yes, they will check every CB receiving NI number against postcode and then SA - their database already has all that information.

Northernlurker · 21/03/2012 20:20

I suspect they effectively won't let you say 'I don't know'. If you say you don't know that will be interepreted by them either as a yes - in which case they clobber you or as a 'no' in which case they chuck the book at you if they find out you do claim and your partner didn't declare it. Now just how they prove the partner knew could be interesting - obviously if you have the CB paid in to a joint account the other party can't claim not to know.

TalkinPeace2 · 21/03/2012 20:21

Obama
I know people involved with the database merger - TRUST ME - it is a humdinger of a system that allows data mining second only to that of the supermarket Loyalty cards

ilovemydogandMrObama · 21/03/2012 20:24

Fine, it may be second only to NASA in capability; that's not the point. People will still need to declare income, and that's the big glaring question here. Not whether there is the capability, but the legal point that one's taxation is separate.

scaryteacher · 21/03/2012 20:24

'HMRC do not use the tax offices for their data any more - when I use online submission they all default to office 1 - it is a single database. They will / have already link you'

I refuse to submit online as it not secure enough. As we get two returns and the address is always different on one, they evidently haven't got it right yet!

scaryteacher · 21/03/2012 20:28

'oranges
they will use data matching - it auto checks thousands of returns at a time
so yes, they will check every CB receiving NI number against postcode and then SA - their database already has all that information'

I have yet to read about/see a govt database that actually works as advertised, and is delivered on time/budget.

TalkinPeace2 · 21/03/2012 20:34

I deal with HMRC at least once a week.
They may not shout about it - and its a database matching bodge rather than one of those silly mega projects
but its there and in use and has been for years.

Apparently they borrowed geeks from the company that designed the Tesco clubcard database

case in point
I today got through the post a tax statement for 2004/05 for a chap I last dealt with six years ago, finally spotting an error we'd forgotten to mention to them.
They can ONLY have spotted it by linking other things he'd been doing before and since on their systems.

AllPastYears · 21/03/2012 20:45

The way they are doing it is completely illogical. It will be assessed on one partner's income (usually the father) and then the CB will be taken away - usually from the mother. So in effect it is a household assessment. But the joint income isn't taken into account.

We will lose our child benefit. It will be a dent in income but won't break the bank. But I do feel sorry for the mums who come on here saying they don't have their own money, they can't leave abusive partners due to lack of savings, they don't have access to joint accounts and have to beg for money to buy kids' shoes. How will this affect them? Sad

Northernlurker · 21/03/2012 20:56

As I understand it - the women receiving CB will still receive it as a payment to them but their partner will have to pay it back if earning over the threshold.

I don't understand why there aren't riots about this policy. Today's changes mean we won't lose all the benefit. With 3 dcs our CB is nearly £200 every 4 weeks so that's a relief BUT I work too. I don't earn as much as dh but we do have two incomes and we will now keep some of our CB whilst a sahm with a husband earning only a little more than dh alone will lose it altogether. It's crazy.

TalkinPeace2 · 21/03/2012 21:03

Northern
As I said at 19:16

Allpast
You will still get the child benefit as normal into the bank every month
BUT your DH will have a higher tax bill to claw the money back
and the abusive partners will have to argue the toss with HMRC

AllPastYears · 21/03/2012 21:04

Oh OK, I haven't been paying enough attention! Blush

TalkinPeace2 · 21/03/2012 21:07

Allpast
Grin I have been involved on the consultations for the implementations for things like these changes so am more aware of how HMRCs brain works than is probably healthy!

scaryteacher · 21/03/2012 22:26

HMRC doesn't have a brain; at least the ones I get to talk to. I often have to ask for the organ grinder rather than the monkey, ie: a real Tax Officer, as opposed to whoever they pay to answer the phones these days who don't have a grasp of legislation. That would include the person who said I was fraudulently claiming cb whilst overseas as in 'all their decades working in cb they had never heard of Forces families being able to claim cb whilst abroad'. Funny that. My mum claimed it for my db when I was 20 and he was 17 and my parents were stationed abroad, and that was 26 years ago.

Whichever way you cut this, it is circumventing the principle of independent taxation. Fine, if they want this on 'household income', give us 'household tax allowances' ie: transferable allowances, or allow me to put the cb against my allowance, which as I earn well under the threshold means I keep it.

scaryteacher · 21/03/2012 22:28

'Allpast
You will still get the child benefit as normal into the bank every month
BUT your DH will have a higher tax bill to claw the money back'

Not true for everyone with the taper. If they wanted to tax it at 40%, then we would still be 60% of cb up. We lose it altogether.

TalkinPeace2 · 21/03/2012 22:29

scary that was pretty much what they said on the lunchtime Radio 4 news
fine to base CB on highest earner, so long as said highest earner can use non earners tax allowance (remember the good old days of the married couples allowance - before tax became individual)

TalkinPeace2 · 21/03/2012 22:31

scary
not sure what you mean. about the taper
if you look at a coding notice for somebody with a nice messy P11d, it has lots of "deemed" earnings - which are the grossed up values of the tax they want to claim back.

So if you are entitled to £160 of the £200 CB then they will change your code by £100 which will up your tax bill by £40.

scaryteacher · 21/03/2012 22:31

I remember married couples tax allowance (from my days as a TOHG), and Higher Rate mortgage relief as well. I also seem to recall something called indexation of thresholds and allowances......

scaryteacher · 21/03/2012 22:38

No messy P11d for the Forces. Straight P60, 8% salary restriction for pension contribution (so not counted as 'contributions' for the net income calculation), unsure if the trading losses mentioned in the Tax guidance means losses on renting out UK home whilst posted abroad.

thegingerwhinger · 21/03/2012 22:46

Would it be any fairer to assess the household income though? A part-time working partner could push the household income just over the threshold, whilst paying childcare costs and earning a minimal amount. Would that not discriminate against mothers returning to work part time?

It's never going to be fair for everyone.

TalkinPeace2 · 21/03/2012 22:51

Women fought so hard for so long to be treated as individuals rather than chattels of their husbands, that it would be SUCH a retrograde step.

gaelicsheep · 21/03/2012 22:52

People are arguing that this CB thing is OK because they are basing CB decisions on household income. That being the case, why the HELL can't they based it on household income when both partners joint earnings come to more than £50k. This whole policy is nonsensical from start to finish!

The Govt are claiming that they can't take into account joint incomes of more than £50k because they are NOT basing it on household income.

I feel like I've stepped into George Orwell world.

thegingerwhinger · 21/03/2012 23:00

£50k isn't a large household income for a family, though.