Child Benefit - Government Pisses money away on new scheme
 

As of this month Child benefit for those earning £50,000 is being reduced by a % down to zero if you earn £60,000

Now I would say the easiest and cheapest way to work this out, is for the HMRC to do the 'simple' maths for the High Earner bracket and just adjust the Child Benefit by the required %.....simples i.e your earn £51,000 (after pension/tax free contributions) thats a 10% reduction in child benefit payment....how hard can it be. Just continue to pay the Child Benefit as per usual just 10% less.


BUT, their not doing this.
Instead if you earn over £50,000 you have to register for Self-Assesment, despite your employer and HMRC already running a PAYE scheme for you.
HMRC then continue to pay you the 'FULL' amount of Child Benefit and after you have submitted your self-assesment for that tax year, they then work out the % you owe and you pay it back !!!!!!! either as a lump sum or via the following years PAYE (so they have got the capability to collect via PAYE)......madness.

Why the hell do you need to submit a self-assesment when they already know your earnings through the PAYE scheme !!!!!!!

Not only that, they ask 'YOU' to tell them how much child benefit you recieved in that tax year. Surley they know that already as they bloody gave it to you.


I see the whole procedure as madness and I would imagine a high % of High Earners will not register for Self-Assesment and continue to get the full amount. Therefore HMRC will pay out to people who are not entitled costing ££££££ or spend ££££££ trying to persue people who owe HMRC.

A number of people will just opt out, so maybe the opting out offsets the ££££ required to persue those not entitled to the full amount.

TOTAL MADNESS (job creation more like.......)

That sounds just rediculous. I recognise (and fully agree) that benefits need to be addressed, as they can't increase at inflation while hard working peoples salaries don't increase at all. But as you say, they know all this information already so surely its possible to automate the process.

Is the £50k limit based your set salary, or a reflection of total earnings through PAYE in one financial year? (what if bonuses, overtime etc tip you over the edge?)

I believe its on total earnings for the year. The other crazy thing is is that If you earn £50k and your mrs earns nothing, you loose it. If you both earn 40k, you dont???? WTF

Cancel child benefit for all, coming from a non parent of course. The benefits system is a joke rewarding the idle creating generations of lazy people. I see it all the time in my job. Grrrr

It's total pay, less any tax free contribution i.e into pensions or charity. If you earn £51,000 and you pay £1000 into a pension then you will still get the full child benefit.

If your basic is £47,000 and you do alot of overtime or get a £5000 bonus, that pushes you above £50,000 so you will get a reduction in child benefit (well you won't you'll get all of it, then have to do the leg work to work out what you owe HMRC).

Totally agree.....what winds me up is that it probably took many many many meetings of very high earners to come up with this scheme.
It probably cost more for them to work it out and implement then it saves.

I've emailed HMRC child benefit query line to ask if as a PAYE tax payer whether it gets worked out automatically. I know the answer but just wanted it from the horses mouth.

If it's anything like previous dealing with HMRC the reply will probably be very blunt and derogatory.

I agree it is madness, but isn't job creation. HMRC are cutting staff left right and centre.

You try getting hold of the ****ers... even in the tax profession with our agent priority lines we struggle.

The letter I got was priceless. I opted not to receive CB any longer, rather than pay it all back and submit a self assessment tax return. HMRC confirmed this in writing, stating I was still entitled to claim the benefit... only I'm not!

A proper pig's ear!

Their right you are still entitled to claim it. You could earn £200,000 and still be entitled to claim it. BUT they will want it all back.

I was tempted to opt out.......but my wife still wanted 'ME' to make similar payments into the account she uses for the kid's. I'd rather spend it on the Scoob :D:D, so am likley to stay opted in.

We do, and have always used the payments on the kids. I doubt those claiming every benefit going do the same.

I know I am entitled, strictly. But that's the same as me offering to get my employer to pay you my salary each month, on the agreement that you fill out a form and pay it in full to me.

Would you feel entitled to.my salary? I suspect not!

We used the money on our little boy. He won't suffer because of it and in some ways I probably don't 'deserve' it. However, I paid for my own education, bought my own home, paying SDLT as it was before any holidays, and generally have done everything society could have asked.

Then, just as we have a child the higher rate tax relief for childcare vouchers is removed and now child benefit. So I am a fair bit worse off... just winds me up a touch!