Wages and Working Tax Credits

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Wages and Working Tax Credits

Postby expressman33 » Sat Feb 18, 2017 6:11 pm

For anyone claiming Working Tax Credits or Child Tax Credits is it really worth them working extra hours . For anyone earning more than there tax allowance, for every £10 they earn they will only be £2.70 better off . The will see their net pay as £6.80 ( after deducting 20% income tax and 12% NI ) but they will also lose £4.10 of their tax credits.

Say someone is on the minimum wage and is asked to work 4 hours on a Saturday . Travel time is 30 minutes each way and their bus fare is £4 . They will be paid £28.80 but after tax, NI and loss of tax credits they will only be £7.78 better off . Then deduct the £4 bus fare so only £3.78 better off for 4 hours work + 1 hour travelling :thumbdown:

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Re: Wages and Working Tax Credits

Postby underfog » Sat Feb 18, 2017 8:46 pm

It's a complex tax system that needs to be made simpler and fairer.

Maybe Sarah can share her thoughts on what she would see as the best?
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Re: Wages and Working Tax Credits

Postby planteria » Sun Feb 19, 2017 8:04 am

simpler and fairer than it was before the coalition came in.. it does pay to work now. lots of people in my local area now go to work, even if part-time, that didn't before.. which is good, in many ways :thumbup:
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Re: Wages and Working Tax Credits

Postby pabenny » Sun Feb 19, 2017 8:59 am

expressman33 wrote:... for every £10 they earn they will only be £2.70 better off . The will see their net pay as £6.80 ( after deducting 20% income tax and 12% NI ) but they will also lose £4.10 of their tax credits...


73% 'tax' rate. Hmm

planteria wrote:... lots of people in my local area now go to work, even if part-time, that didn't before.. which is good, in many ways


Certainly a Good Thing. The result of changes in benefits or the improved state of the economy?

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Re: Wages and Working Tax Credits

Postby expressman33 » Sun Feb 19, 2017 9:35 am

planteria wrote:simpler and fairer than it was before the coalition came in.. it does pay to work now. lots of people in my local area now go to work, even if part-time, that didn't before.. which is good, in many ways :thumbup:


It's not that bad if you are earning below the Income tax and NI thresholds , if you are working part time and only earn about £6,000 then if you work extra to take your wage to £7,000 you would only lose £410 of the extra £1,000

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Re: Wages and Working Tax Credits

Postby planteria » Sun Feb 19, 2017 10:41 am

pabenny wrote:Certainly a Good Thing. The result of changes in benefits or the improved state of the economy?


both.. but primarily the former. the intentionally created dependent class are now better off if they go to work. it has been hugely successful reform. further improvements hopefully to come. locking in votes with benefits dependency and the bloating of the public sector has cost us beyond comprehension and has backfired. we'll never recover some of the damage from that era, with assets sold to fund the bloating etc, but i'm positive for our future.

back to expressman.. it has to be considered carefully. anyone sensible can understand someone choosing not to do extra hours if they will not benefit financially, at a reasonable level, by doing so. i suppose there are some people that could benefit far more than a few pounds by showing willing at certain times, though. it all depends upon the circumstances. whatever happens, good luck.

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Re: Wages and Working Tax Credits

Postby expressman33 » Sun Feb 19, 2017 10:58 am

planteria wrote:back to expressman.. it has to be considered carefully. anyone sensible can understand someone choosing not to do extra hours if they will not benefit financially, at a reasonable level, by doing so. i suppose there are some people that could benefit far more than a few pounds by showing willing at certain times, though. it all depends upon the circumstances. whatever happens, good luck.


thanks but it is not me , I retired a few years ago. I was advising a relative who was working some Saturdays who didn't realise how little better off they would be
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Re: Wages and Working Tax Credits

Postby jaytee » Sun Feb 19, 2017 11:07 am

expressman33 wrote:For anyone claiming Working Tax Credits or Child Tax Credits is it really worth them working extra hours . For anyone earning more than there tax allowance, for every £10 they earn they will only be £2.70 better off . The will see their net pay as £6.80 ( after deducting 20% income tax and 12% NI ) but they will also lose £4.10 of their tax credits.

Say someone is on the minimum wage and is asked to work 4 hours on a Saturday . Travel time is 30 minutes each way and their bus fare is £4 . They will be paid £28.80 but after tax, NI and loss of tax credits they will only be £7.78 better off . Then deduct the £4 bus fare so only £3.78 better off for 4 hours work + 1 hour travelling :thumbdown:


I agree it is not a lot, but as my father always taught me - Look after the pennies and the pounds look after themselves.

How many of us, on this site alone, people spend 15 minutes a day doing the free Daily Clicks for 40 -50p or so (if they all track)?

If someone is able to, I believe there is a moral obligation to work to support themselves. The extra tax and NI they pay, and taking a little less from the system means they are doing a service to society - a little more money available for the NHS, Social Care etc.

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Re: Wages and Working Tax Credits

Postby planteria » Sun Feb 19, 2017 11:31 am

a nice idea jaytee, but the reality is that the skewing to a personal gain from doing some work has been, and remains, the key.

and i kind of assumed it wasn't you em, but i wish you and they good luck anyway. :mrgreen:
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Re: Wages and Working Tax Credits

Postby macliam » Sun Feb 19, 2017 11:53 am

For those who think they "know" me, this may sound unlikely, but I am completely in favour of a revision to social welfare payments. I don't necessarily think it has evolved in an attempt to "lock in" votes, but rather due to lazy reactive legislation and the fear of alienating large voting blocs (by all parties). The problem is that any changes need to be quite fundamental and people don't like change.

What previous governments created, with some good intent, is actually a true case of "learned helplessness", a belief that someone else is responsible for support and that individuals have a "right" to claim a portion of the national wealth. The very start of this thread is a case in point - it may be true that paid work will provide little more incentive for the individual, but that is only because the individual's true situation had been distorted by the state payments received. In fact the individual will gain something and the state will be able to apply the money "saved" elsewhere and in support of someone else. As Marx said, "From each according to his ability, to each according to his need".

HOWEVER, the problem with all this is that we are where we are and the motives of those seeking change are not always altruistic. Personally, I see few who convince me that they have the will or the capacity to change the system for the better, some due to dogma, some due to self-interest, most due to ineptitude.
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