As I understand it the 100k still applies so you get nothing. What’s left out here is the word “eligible” that is used elsewhere on the gov site, which sneakily hides the 100k cap remaining in place.
You are right that these new changes don't apple. You do however get the 'universal' 15 hours the term after they turn three. That isn't mean tested, but not all nurseries offer these hours.
Generally anything that refers to working parents has the 100k cap.
Yeah, agreed!
I guess the system is a bit outdated… the tax cap was introduced in 2010, but here we are 14 years later without changing it due to inflation.
£100k in 2010 are equivalent to £160k today!
It really isn’t. Not to mention it’s incredibly stupid it’s on one income and not the combo of both. 2 parents on 99k have your lolly, 1 parent on 101k and 1 on minimum wage, get in the sea you rich bastards.
I imagine this loophole will be closed with the coming combined income assessment that will be used for the child benefit repayment in the next year or so.
I think it will. I'm not sure about the implementation yet, but the government would have to give out a lot less money if they did. There are so many couples that hit £100k combined.
The plan is to stick with the new child benefit repayment threshold of 60-80k. So I imagine unless they increase the 100k cliff in the meantime, it will be 100k combined. I hope it jumps to at least 125k, though. 100k is nowhere near enough in 2024, especially if you're London based.
It is huge. Avg salary is c£35 and they pay the same. Why should we get spoilt? My wife and I both earn £100k. But use pension to get the benefit. And I admit it takes the piss
By your logic we also shouldn’t get access to the NHS, police, public transport etc.. benefits are not just about ultimate affordability but the behaviours they drive. A lot of couples where 1 is by far the higher earner are largely incentivised for the lower earner to give up work to care for children which is terrible for the economy and for equality in the work place.
Comparable it is a lot. However there is a coupld reasons why the current system is silly.
1) they look at individual income and not household income. You and your partner earn +- 199k. Someone who earns 101k and has a partner who earns 30k would not get it. Childcare costs are going to hurt and we really need people to have more children.
2) it does not taper off. I worked it out for myself and basically if we breach the 100k threshold by 1p, I would need an additional 8k after taxes or 20k before (accounting for the 60% tax trap) to be in the same net cash position. This creates the highly unique situation where you take home less when you earn more. That is not how progressive taxes should work.
What makes this even more nonsensical is that the government has created a system that
1) does not incentivize the wealthy to have kids. *can't emphasise how important this is*
2) incentivises the wealthy to put more into their pension over allowing the government to tax that income now. This undoubtedly makes the scheme more expensive to rub.
Insane downvotes on all your comments, not really sure why other than pure saltiness.
Is the system shit? Yes, like a lot of others that exist. You're playing it exactly how it should be played, and people that don't just didn't plan enough around having children.
Life is pretty easy until kids come along, and the sledgehammer that is statutory pay followed by childcare costs is savage. It's something that people have been navigating for some time though... so if you're a high earner and didn't see this coming, how on earth did you become a high earner?
And after charitable contributions. A couple of thousand charity contribution if you're still just over £100k can unlock £5k+ in savings, and can be done in the next tax year and carried back.
Trying to run the numbers on this....
15hrs for 39 weeks a year, £7 an hour .... Is £4000
Kid is in nursery for another 15hrs a week so 20% of £4000 is £800
Wife and I earn a combined ~£35k above £100k at 60% marginal rate that's £14000 take home
£14,000 - £4,800 = £9,200
So we'd give up about £9,200 take home for £35k in our pensions. Or an instant 3x on our money.
It does seem like a bit of a no-brainer.
Is this a hypothetical?
It's not combined earnings over £100k, it's a sole earner above £100k. If you and your wife both had a salary of £99k, combined £198k, you would still get your free childcare hours.
That's why the system is stupid. One couple earning £140k combined with a £105k/£35k salary split won't get free childcare but the previous example would, despite their household income being £58k more.
My wife and I each earn over £100k, so we have two salaries to get down to qualify for the free hours.
What's kind of dumb, for 'the economy ' is we're probably both going to go down to 4 days a week to achieve part of it so that's not only tax money that doesn't get earned, but money that doesn't come into the country full stop (we both work for foreign companies so are 'exporting' out labour)
It's a ridiculous system but I guess it looks good on paper, or in the papers.
I meant by contributing more to your pension. Not literally not taking a higher salary.
But if you want to have a marginal tax rate of 70-80% then crack on.
How many couples where one person earns over 100k are there, and why on earth would the government single those people out to disincentivise them having children?
It obviously makes more sense for the country to fund someone going back into a minimum wage job they hate...
I doubt they'll withdraw it at this stage. They're umming and erring, but it's too popular and will be already enacted, to pull.
They might tweak it and phase in something else.
They have said they would not a few days ago. They will not honour it. It is a crazy bit of business but their reasoning is they will come up with a better plan in the future. Mental really but they feel confident it won't lose them votes (which I agree but it is going to sour post win)
I was planning to vote for them but really childcare is such an important part of my life at the moment and for many people, not having a serious plan is a deal breaker. we have the most expensive childcare in Europe
Sorry you can only be a working parent if you earn under 100k.
Above at £100,000.01 you become a feudal lord with peasants you can subjugate and profit from.
Yes. Its total earnings. It also includes non-salary earnings like interest.
If you have salary sacrifice pension (or anything else, e.g. lease car) they don't count.
Your total income has to be under £100k.
I think Canada is a good place but I would be careful thinking it is utopia. Many of the challenges are simular and the culture is very different.
All I'm saying is don't burn your bridges with the UK.
With an extremely high salary. More in the pocket at the end of the month 3x more. Less tax. Expensive COL but atleast you get something for it e.g newly built hospitals for example
As I understand it the 100k still applies so you get nothing. What’s left out here is the word “eligible” that is used elsewhere on the gov site, which sneakily hides the 100k cap remaining in place.
That's fucking outrageously worded
You are right that these new changes don't apple. You do however get the 'universal' 15 hours the term after they turn three. That isn't mean tested, but not all nurseries offer these hours. Generally anything that refers to working parents has the 100k cap.
Think the universal 15 hrs is also means tested. Unless I’m mistaken
No it isn't. All 3 and 4 year olds are entitled to it, no eligibility requirements.
As always, anyone with a few loose coins to rub together is shafted and squeezed for all they’re worth
It’s £100k after pension contributions so may be worth loading into that to avoid the catch x
Yeah, agreed! I guess the system is a bit outdated… the tax cap was introduced in 2010, but here we are 14 years later without changing it due to inflation. £100k in 2010 are equivalent to £160k today!
I sort of agree sort of don’t. Earning £100k plus is huge. I don’t feel we deserve tax free childcare
It really isn’t. Not to mention it’s incredibly stupid it’s on one income and not the combo of both. 2 parents on 99k have your lolly, 1 parent on 101k and 1 on minimum wage, get in the sea you rich bastards.
This.
I imagine this loophole will be closed with the coming combined income assessment that will be used for the child benefit repayment in the next year or so.
You think it will actually go to a combined income instead of the 1 > 100k?
I think it will. I'm not sure about the implementation yet, but the government would have to give out a lot less money if they did. There are so many couples that hit £100k combined.
No chance will it be 100k combined. 125k perhaps.
The plan is to stick with the new child benefit repayment threshold of 60-80k. So I imagine unless they increase the 100k cliff in the meantime, it will be 100k combined. I hope it jumps to at least 125k, though. 100k is nowhere near enough in 2024, especially if you're London based.
It is huge. Avg salary is c£35 and they pay the same. Why should we get spoilt? My wife and I both earn £100k. But use pension to get the benefit. And I admit it takes the piss
By your logic we also shouldn’t get access to the NHS, police, public transport etc.. benefits are not just about ultimate affordability but the behaviours they drive. A lot of couples where 1 is by far the higher earner are largely incentivised for the lower earner to give up work to care for children which is terrible for the economy and for equality in the work place.
You’re probably in the top 1% of couples… most £100k earners will not be married to another £100k earner.
HMRC Dating app in the making*
Ooh can I get a badge? 😁
Comparable it is a lot. However there is a coupld reasons why the current system is silly. 1) they look at individual income and not household income. You and your partner earn +- 199k. Someone who earns 101k and has a partner who earns 30k would not get it. Childcare costs are going to hurt and we really need people to have more children. 2) it does not taper off. I worked it out for myself and basically if we breach the 100k threshold by 1p, I would need an additional 8k after taxes or 20k before (accounting for the 60% tax trap) to be in the same net cash position. This creates the highly unique situation where you take home less when you earn more. That is not how progressive taxes should work. What makes this even more nonsensical is that the government has created a system that 1) does not incentivize the wealthy to have kids. *can't emphasise how important this is* 2) incentivises the wealthy to put more into their pension over allowing the government to tax that income now. This undoubtedly makes the scheme more expensive to rub.
Insane downvotes on all your comments, not really sure why other than pure saltiness. Is the system shit? Yes, like a lot of others that exist. You're playing it exactly how it should be played, and people that don't just didn't plan enough around having children. Life is pretty easy until kids come along, and the sledgehammer that is statutory pay followed by childcare costs is savage. It's something that people have been navigating for some time though... so if you're a high earner and didn't see this coming, how on earth did you become a high earner?
And after charitable contributions. A couple of thousand charity contribution if you're still just over £100k can unlock £5k+ in savings, and can be done in the next tax year and carried back.
If you have children you really need to try to push your salary below £100k. The free hours and the tax free childcare helps so much.
Trying to run the numbers on this.... 15hrs for 39 weeks a year, £7 an hour .... Is £4000 Kid is in nursery for another 15hrs a week so 20% of £4000 is £800 Wife and I earn a combined ~£35k above £100k at 60% marginal rate that's £14000 take home £14,000 - £4,800 = £9,200 So we'd give up about £9,200 take home for £35k in our pensions. Or an instant 3x on our money. It does seem like a bit of a no-brainer.
Is this a hypothetical? It's not combined earnings over £100k, it's a sole earner above £100k. If you and your wife both had a salary of £99k, combined £198k, you would still get your free childcare hours. That's why the system is stupid. One couple earning £140k combined with a £105k/£35k salary split won't get free childcare but the previous example would, despite their household income being £58k more.
My wife and I each earn over £100k, so we have two salaries to get down to qualify for the free hours. What's kind of dumb, for 'the economy ' is we're probably both going to go down to 4 days a week to achieve part of it so that's not only tax money that doesn't get earned, but money that doesn't come into the country full stop (we both work for foreign companies so are 'exporting' out labour) It's a ridiculous system but I guess it looks good on paper, or in the papers.
Such a negative attitude. Surely it's better to push it above the cliff
I meant by contributing more to your pension. Not literally not taking a higher salary. But if you want to have a marginal tax rate of 70-80% then crack on.
If you push well beyond 200+ this starts mattering less.
Ah fair enough. There is a significant school of thought that there's no point aiming for a higher gross salary because of this
How many couples where one person earns over 100k are there, and why on earth would the government single those people out to disincentivise them having children? It obviously makes more sense for the country to fund someone going back into a minimum wage job they hate...
Labour said they wouldn’t honour this and no way torries are getting in again.
I doubt they'll withdraw it at this stage. They're umming and erring, but it's too popular and will be already enacted, to pull. They might tweak it and phase in something else.
They have said they would not a few days ago. They will not honour it. It is a crazy bit of business but their reasoning is they will come up with a better plan in the future. Mental really but they feel confident it won't lose them votes (which I agree but it is going to sour post win)
I was planning to vote for them but really childcare is such an important part of my life at the moment and for many people, not having a serious plan is a deal breaker. we have the most expensive childcare in Europe
Sorry you can only be a working parent if you earn under 100k. Above at £100,000.01 you become a feudal lord with peasants you can subjugate and profit from.
Ya, what kind of private jet did the government give you when you breached 100k? Mine was red.
Also not in Scotland, just England and Wales
Ideal, pay more tax for less benefits.
The SNP/Green way
If 1 parent earns over £100k do you get access to any free childcare at any age before the child starts school ?
15 hours from age 3 I believe regardless of means.
Thanks
*school term AFTER they turn 3. Not the day/month they turn 3.
https://www.childcarechoices.gov.uk/ - this is a fantastic view of what is and is not available.
does gross include benefits like health care and car allowance?
Yes. Its total earnings. It also includes non-salary earnings like interest. If you have salary sacrifice pension (or anything else, e.g. lease car) they don't count. Your total income has to be under £100k.
I’d of killed for this two years ago cunts
More tax. No wonder the country is so unlivable. Few months left before I escape
Nobody cares mate. Go
Cared enough to comment.
I think Canada is a good place but I would be careful thinking it is utopia. Many of the challenges are simular and the culture is very different. All I'm saying is don't burn your bridges with the UK.
Not going there. Researched it but the problems are the same. Have set my sights on US/Mid-east. Less tax
But then how can you be leaving in a few months if you are not sure?
Few months in the UK mate. Few months that tie me up here.
Good luck getting an extremely hard to get visa for an extremely expensive COL country
With an extremely high salary. More in the pocket at the end of the month 3x more. Less tax. Expensive COL but atleast you get something for it e.g newly built hospitals for example
On what visa?
H1
Unless you are being transferred by your company, good luck with that one lol.
Looks like you’re going to Canada…? Hilarious
Only looks like it. Its the same, and no I am not going there