The Great Tax Credit Rip-Off

Yes, as you might have gathered I was just being a pedantic sod.

Assessing people for tax individually maximises revenue for the government. Assessing people for tax credits and benefits as a couple minimises the amount the government pays out. To change this would require big tax rises somewhere, and the government haven't got the balls. At least not until families with a single earner start actually realising how much they are getting screwed for.

I have no idea.

But if the tax credit award was based on earnings very different from what you are earning now, just ask them (write a simple letter to the address on your award letter) for a recalculation based on current earnings. It's probably worth pointing out that you have the original uncashed cheques (perhaps a send photocopies of them to help them work out what you are still entitled to).

You are legally obliged to declare to the council for HB/CTB all income (including tax credits).

I think you don't really know what you are talking about.

You are the one calling for chaos ("sheer pandemonium"). I merely asked why you want chaos.

If your earnings have gone up the first 2500 is discounted I believe, which could be quite useful.

James

When I said "you shouldn't tell them" I meant you shouldn't tell the IR that they are overpaying you tax credits. You are under no obligation to do so. That way the resulting reduction in tax credits next year could get you some HB. Clive on u.g.s-s explained it better a while ago.

For many years, married couples were assessed jointly for Income Tax, and could elect to be assessed separately as single people if it was to their advantage. This was to avoid the joint income going into the higher tax bands of 50% or more.

1 - My query is not about the rights or wrongs of redistribution (another highly contentious debate), it is about the competence (or lack of) with which it is administrated. 2 - The system is at least fairer than the ridiculous child benefit payments which are paid totally regardless of need. 3 - Perhaps today's kids will one day pay your old age pension. They will certainly be the people who look after you in your care home, serve you in the supermarket, or come to fix your sink when it's blocked etc etc etc etc etc. So maybe it is wise to invest in their upbringing today.

I don't think you read my post.

I had never called for chaos. It's not a question of wanting chaos it but anticipating it. This government will bring it on itself though lack of foresight. You haven't answered my question put to you. Don't you anticipate chaos?

I don't anticipate chaos.

I don't encourage chaos.

You do both.

(BTW I think the current government just like previous governments in the UK over that past few decades are not the least bit interested in ordinary people's lives and gains and losses... just in whether they can persuade someone to vote them into power...)

I have done so and the award was recalculated.

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Benefits which aren't means tested are actually more redistributive than means tested benefits. If you look upon CB as a percentage of government spending, and then apply that percentage to individual's tax bills, people on high incomes will be paying far more in than they get out, and vice-versa for people on low incomes.

The other problem with assessing people's financial needs before giving them benefits/tax credits, as already discussed in this thread, is that as their need reduces (ie their income increases), their benefits/tax credits also reduce. Which means when you add the extra tax they pay, they only get to keep a tiny amount of any increase in income they get. Would you bother getting a more demanding job for 1000 a year more if that only actually made you 45 a year better off?

Means tested benefits/tax credits are also necessarily bureaucratic, as we've seen, resulting is lots of form filling, confusion, mistakes etc. Child benefit is simple to apply for, you only need to apply when your child is born and then forget about it until your child is 16.