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Child Benefit Cut => Increase In Charitable Donations

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Consider a family with three children and an earner on £45,000 pa.

Currently they receive about £2500 pa in child benefit. After the child benefit changes they would be far better reducing their income by just over £1000. A very simple way to do this is to increase charity payments by this amount. And there is the added benefit of making the person paying feel like an all-round good bloke.

So might this lead to increase in charity payments from certain families...?

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Consider a family with three children and an earner on £45,000 pa.

Currently they receive about £2500 pa in child benefit. After the child benefit changes they would be far better reducing their income by just over £1000. A very simple way to do this is to increase charity payments by this amount. And there is the added benefit of making the person paying feel like an all-round good bloke.

So might this lead to increase in charity payments from certain families...?

Why give to charity when you could get the same net result by making additional pensions contributions.

charity begins at home after all.

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Why give to charity when you could get the same net result by making additional pensions contributions.

charity begins at home after all.

Pensions and charities are equally valid tax-avoidance vehicles. I'd expect both to benefit.

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So to clarify: is the Child benefit decision based on gross income of £44,000 (approx), or is it people who pay any higher rate tax...?

I can see they are different...

i heard its going to be based on whether you were wealthy enough to afford a fish tank

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What would benefits be based on? I don't know - but had rather assumed it was something to do with your gross pay. No?

For tax credit purposes the income assessment (for PAYE employees) is based on net pay, i.e. "gross pay less any superannuation contributions and charitable donations".

For assessing student support for "dependent" students, the relevant figure (for the Student Award Agency for Scotland; I think it's different elsewhere) is the parent's gross income.

Real joined up government.

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There was a fair point in the Guardian yesterday that if you are near the cut-off to think carefully about payrises as you would need a £3000-£4000 increase to make it worthwhile.

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For tax credit purposes the income assessment (for PAYE employees) is based on net pay, i.e. "gross pay less any superannuation contributions and charitable donations".

For assessing student support for "dependent" students, the relevant figure (for the Student Award Agency for Scotland; I think it's different elsewhere) is the parent's gross income.

Real joined up government.

I imagine there'll be a lot of people hoping its the first case and based upon your taxable income.

If you thought the wailing was bad this week, can you imagine the outcry if people who don't pay higher rate tax lose it. We were definitely sold this pup on the basis of being a higher rate tax pyer.

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After the child benefit changes they would be far better reducing their income by just over £1000. A very simple way to do this is to increase charity payments by this amount.

Far simpler is to sign up to employer childcare voucher scheme. £243 per child per month tax-free, guaranteed to reduce taxable income by £2,916 per child per year.

This is going to change from April 2011 but still financially better than charity donations trick.

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Consider a family with three children and an earner on £45,000 pa.

Currently they receive about £2500 pa in child benefit.

WHAT?????

Is this true?

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WHAT?????

Is this true?

My reaction too.

£2.5k for someone earning more than the avg household income?!

:angry: give it back to families who actually need it. (ie earning less than £20k) :angry:

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Remember though that of all those families affected, most will be comfortably earning higher than this cut off zone, say 44-50k. Although if you believed the (hugely VI) media, you would think all of our highest earners were struggling to get by on around 45k (naturally with only one earner too).

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Salary sacrifice.

So that £2.5k is just from the salaried gross income so that person avoids having to pay tax on that part of their income at 20% (basic rate) or 40% (higher rate) so reducing tax paid by 500 and 1k respectively!

Edited by tomposh101

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You need to reduce your pay so that it is less than £44,000. The only way to do that is to lower your pay via salary sacrifice or increased holidays.

I can see a fair few jobs below £50000 becoming £43.5K with 7/8 weeks holiday.

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You need to reduce your pay so that it is less than £44,000. The only way to do that is to lower your pay via salary sacrifice or increased holidays.

I can see a fair few jobs below £50000 becoming £43.5K with 7/8 weeks holiday.

I suspect that increase pension contributions would be very welcome by the government. They will be invested in shares and Government bonds.....

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You need to reduce your pay so that it is less than £44,000. The only way to do that is to lower your pay via salary sacrifice or increased holidays.

I can see a fair few jobs below £50000 becoming £43.5K with 7/8 weeks holiday.

Take care with that. £43.5k is easy to tip over the threshold with any little addition. Even something as simple as savings interest.

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I suspect that increase pension contributions would be very welcome by the government. They will be invested in shares and Government bonds.....

Shares, yes. Bonds, yes. Government bonds ... unlikely at today's rates. Noone with as much choice as pension funds have wants such an obviously-overpriced asset.

Now tell me, if the government is so keen on pension contributions, why are they reported to be capping them, at a level comparable to the lifetime limit for those with long-term high earnings but penalising those with erratic earnings?

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My reaction too.

£2.5k for someone earning more than the avg household income?!

:angry: give it back to families who actually need it. (ie earning less than £20k) :angry:

2.5K refund to a family that pays >10K in tax and Ni sounds fair enough to me

Given that the other 7.5K will pay for another 3 families worth of child benefit it sounds like they're giving enough away to charitable causes anyways

I bet no-one here was for the UK giving up its eu rebate. We actually used the reasoning we are one of the eu's biggest contributors as a reason why we should get money back.

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I think the change to C.B. will catch a lot of people out. It's surprising how many people slip into that 40% tax bracket without actually realising it, most people on PAYE just receive a payslip with basic information on it: gross pay, N.I. deductions, Income Tax deductions, these are not normally broken down into so much at 20%, so much at 40%... and most people I know don't look too closly at it, just top line, bottome line and a sigh of despair.

Tjose who are paying income tax at 20% will also be paying N.I. at 12% (I think that's the current rate?) so total decuctions are 32% for a large block of their earnings. Then when you reach the dizzy heights of paying income tax at 40%, the N.I. will have fallen to just 1%. Throw in some minor adjustments for any pension conributions and the difference between a lower rate tax payer and a higher rate tax payer isn't that great (32% vs 41%).

Many people doing what are considered ordinary jobs are starting to hit that 40% tax rate - police constables with a bit of overtime, senior NCO's in the armed forces (depending on trade), senior teachers, technicians with overtime and perhaps shift allowances or on-call bonuses. OK, you're in this situation and you notice that perhaps the top £1,000 or £2,000 of pay has had deductions or 41p in the pound instead or 32p in the pound, you accept it and consider yourself fortunate to be earning at this level.

Suddenly instead of losing an extra 9p in the pound you lose perhaps £1,050, £1.00 or £2,500 because you have 1, 2 or 3 children. That's goto hurt.

In addition to this the starting point for 40% tax is going to be lowered by quite a bit (to allow for an increase in the allowance before other starting to apy income tax at all), that going to catch a lot more people who never considered themselves high earners.

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There was a fair point in the Guardian yesterday that if you are near the cut-off to think carefully about payrises as you would need a £3000-£4000 increase to make it worthwhile.

I got a £2.5K rise after a promotion, taking me over £44K, 5 days before this kicked off.

I have 2 kids, so it was more than wiped out and I am worse off. Plus my wife doesn;t work and the couple next door get to keep theirs, despite both working.

F*cking cheers Osborne you tw@ :angry: :angry: :angry:

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I got a £2.5K rise after a promotion, taking me over £44K, 5 days before this kicked off.

I have 2 kids, so it was more than wiped out and I am worse off. Plus my wife doesn;t work and the couple next door get to keep theirs, despite both working.

F*cking cheers Osborne you tw@ :angry: :angry: :angry:

The proposal is to introduce the CB measures in 2013.

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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