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Lib Dems ARE cutting "Middle Class Tax Credits"

74 replies

Sweeedes · 18/04/2010 12:45

Just so there's no confusion.

OP posts:
noddyholder · 18/04/2010 12:56

Why do people on a decent income need more?We don't get them but what exactly are they?It seems like a top up of some sort.Lower taxes and better priced nursery care would be far better.My friend has a 3 yr old and is a single mum.She was getting the bulk of her little girls nursery paid and it enabled her just about to get by.She has been promoted at work and has had a miniscule wage rise and now she is over the limit for certain things and is in the *t!I don't understand them at all

ilovemydogandmrobama · 18/04/2010 13:00

Meaning cutting the working tax credits?

fruitshootsandheaves · 18/04/2010 13:00

what makes me cross is that we will lose ours as our income is just over 50k, however we actually bring home quite a bit less than 50k after tax and we will be very overdrawn every month without the tax credits.

noddyholder · 18/04/2010 13:02

Why don't they just lower taxes?What are the credits for?How much do people get?

Trafficcone · 18/04/2010 13:03

Oooh look another party penalising those of us who pay our way and get off our arses and work for a living. I love how the predominant message in this country is "we'll reward you as long as you do as little as possible, earn as little as possible and adopt a victim mentality"

helyg · 18/04/2010 13:04

Since when has "middle class" been an income bracket?

Surely "middle earners" would be a better term....

helyg · 18/04/2010 13:06

Also, someone on the minimum wage does not necessarily work any less hard than someone on £50k a year.

anastaisia · 18/04/2010 13:29

Erm, cutting tax credits while increasing the tax threshold.

Not quite the same as just taking away the tax credit money and letting people starve, I'd assume those middle earners will do okay from not having to pay income tax on either £10k or £20k depending on it one or both of them work.

Sweeedes · 18/04/2010 14:20

If they intend to put a stop to middle class tax credits then I'm not sure I see the point of it as an election pledge, if they intend to pay it back as an income tax free allowance

Agree middle class IS NOT an income band. But income doesn't always tell the whole story about the state of someone's financial affairs. Lots of people keep their income low in order to be tax efficient (totally legal). Esp as Capital Gains Tax is currently 18% and highest rate income tax is 50%. If you are able to exercise discretion as to how you get at your money, then why would you take it as income?

OP posts:
daphnedill · 18/04/2010 14:21

I've been in the same situation as some of you on here. When I was married, hubby and I together earned about £50k pa. It was before the days of tax credits for nursery places, so we had to pay in full and the only hand out we received was Child Benefit. We cursed the fact that some people seemed to have more than we did on a much lower income, but accepted we had a choice. I've worked hard all my life.

Then we divorced, hubby was made redundant and I was kicked out of my job after being ill for over a year. I now live on an income of about £15k, don't receive any help with housing costs and have a huge overdraft. I rely totally on Child Tax Credits.

If the LibDems get their way the tax threshold for basic tax payers will be raised. Savings HAVE to be made somewhere, so are the people moaning about this suggesting that the lowest paid should pay?

PS. I agree there are anomalies in the Tax Credits and Benefits systems, which need sorting, so that work really does pay.

Collision · 18/04/2010 14:21

Fruitshoots - can I be nosy and ask approx how much tax credits you get?

daphnedill · 18/04/2010 14:31

Fruitshoots - is that aimed at me?

It's been different practically every month since I lost my job last year and I was told to wait until the end of the tax year for the final adjustment. Currently I think (without checking)it's about £220 a month. The trouble is that it's worked out on my total income for the 2009/2010 tax year and until October, I was earning a decent salary. I'm hoping that it will increase now we're in a new tax year, but I'm not quite sure by how much. I'm not eligible for Working Tax Credit, because I earn too much.

anastaisia · 18/04/2010 14:32

Lib Dem's Tax Plans briefing note

Curiousmama · 18/04/2010 14:35

fruitshoots is a poster

daphnedill · 18/04/2010 14:35

Basically, the system thinks I need about £18,500 a year for two school age children (not needing childcare) and me. It tops my income up to about that level and then starts to decrease the amount of help. If I were to be unemployed for over six months, I would have my Council Tax and mortgage interest paid. As it is, I have to pay both, although I'm going to reapply for help with Council Tax.

daphnedill · 18/04/2010 14:36

"fruitshoots is a poster"

ooops!

fruitshootsandheaves · 18/04/2010 14:42

We get about £200 a month

noddyholder · 18/04/2010 14:48

The no tax on the first 10k should save about £700 a year.I still don't see the point in giving people money like this Why not just not take it from them in the first place?iyswim

daphnedill · 18/04/2010 14:53

Noddy, not quite sure which way round you want things to be. The point of raising the tax threshold is that it will take the very lowest earners, including many pensioners, out of the tax system altogether. Some pensioners don't like claiming Pension Credit, because they dislike benefits, but have a different attitude to tax. Low earners without children will also benefit and the whole system will cost less in administration.

noddyholder · 18/04/2010 15:05

I agree with the lib dems on this I have no experience of Tcs and just wondered what their purpose is!

noddyholder · 18/04/2010 15:06

Sorry in my last post the money being given I was referring to was the TC not the 700 from the first 10k

Sweeedes · 18/04/2010 15:07

It does sound sensible to not tax people then pay them back with tax credits. It's an absurd system.

I must look more into Lib Dems manifesto. They come second where I live so are a real possibility in this seat (Labour come third) but people are surely worried about voting Lib Dem and getting Labour?

OP posts:
daphnedill · 18/04/2010 15:23

Tax Credits should, in theory, make work pay. Before they were introduced, there were people taking very low paid jobs who were worse off than if they had been receiving Unemployment Benefit and/or Income Support.

They are supposed to top incomes up to a level which is calculated by need. So...a person with children is considered to need more money than one without. Childcare is included as a need, so pays for 70% (?) of childcare costs up to a certain level of income (£50k ?), when it is clawed back at the rate of £1 for every £2 earned (I think...need to check details).

There are certainly anomalies. For example, needs and income are worked out per household, so a single parent with a very low income will get more than if he/she is living with a partner who earns a reasonable amount. In those circumstances, it's financially beneficial for them to live apart, especially as the lone parent would probably qualify for other benefits such as Housing Benefit. This is where the Tory idea of marriage not paying comes from.

SingleMum01 · 18/04/2010 15:35

I'm a lone parent with 1 DS. I earn 10K and I have a mortgage. I work part-time and I pay childcare for my DS whilst I work. I don't get any other benefits apart from tax credits and wouldn't be able to survive without them.

wastwinsetandpearls · 18/04/2010 15:45

So if I turn up at the benefits office with a flat cap and whippet feeding my child a Gregg's Sausage roll I will get a tax credit.

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