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When does child benefit stop for higher-rate tax payers?

5 replies

Appuskidu · 30/12/2011 20:24

We have 3 children and DH earns £42,400 which, I think, is right on the edge of the 40% tax bracket. I presume when the child benefit changes come into force we will lose £187 a month? His salary looks loads on paper, but when paying hundreds each month on train fares, I suppose now he would be better off financially earning less and working closer to home (if there were any jobs).

Does anyone know when this happens-is in 2012 or 2013?

OP posts:
VivaLeBeaver · 30/12/2011 20:27

2013 I'm 99% sure it is anyway.

OddBoots · 30/12/2011 20:40

Looks like you are a tiny bit under the threshold so you should be okay unless he gets a pay rise before 2013. As you stand to lose over £2k per year if Child Benefit stops (assuming it is an absolute cut not a phased reduction, I'm not sure it's been clarified) it may be worth thinking about your dh paying more into a pension if he gets a rise that is more than into 40% but less than £2k extra.

Appuskidu · 30/12/2011 20:47

Thank you-2013 seems to be the year then. I would imagine he will get a pay rise in that time-I suppose he could refuse it though??!

Does it not take your pension into account then? So he could get paid £42000 and pay £200 a month (£2400) -would that take him under the amount??

OP posts:
LaCerbiatta · 30/12/2011 20:50

Does he get 42K after his tax free allowance? If he has 6000 tax free (that's roughly what I have) then it's as if he only gets 36K, for tax banding purposes.

OddBoots · 30/12/2011 21:01

What counts (as far as we know, the gov aren't being very clear) is taxable pay and anything paid into a pension isn't taxable.

allowances

In 2012/13 personal allowance is £8 105 and you can earn £34 370 above that at 20% so £42 475 is the point at which the 40% kicks in.

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