HSMP applicant have to pay FULL tax rate?

[lanwarrior]

Hi all,

According to the HSMP Guideline document (Page 8, number 44), a successfull HSMP applicants are NOT allowed to obtain PUBLIC FUNDS, which includes the following:

"Child Benefit; Working Tax credit or a social fund payment; Child Tax Credit.."

So does that means that if I work in UK (as an HSMP beneficiary) and pay UK tax, I can NOT claim the "Working Tax" credit and "Child Tax" credit and MUST pay the full amount of tax without any deduction?

For comparison, the Working Tax credit is equivalent to US standard personal deduction and Child Tax credit is... well.. deduction for tax for those with children.

If the above is true, that means if I file a UK tax, I can NOT apply the tax deductions from the above and means I have to pay the FULL tax rate.

Example:
Salary = 50K
Tax = 40%
DEduction = 0

[John]

If your suggestion is that the calculation is as simple as £50000 @ 40% = £20000 income tax liability ... well thankfully, no way!

Have a look at this webpage on the HMRC website. You will be entitled to a Personal Allowance of £5035, so that amount of income is effectively tax free.

Then the next £2150 is taxed at 10%, the next £31150 @ 22%, and only after that is income taxed at 40%.

[lanwarrior]

If your suggestion is that the calculation is as simple as £50000 @ 40% = £20000 income tax liability ... well thankfully, no way!

Have a look at this webpage on the HMRC website. You will be entitled to a Personal Allowance of £5035, so that amount of income is effectively tax free.

Then the next £2150 is taxed at 10%, the next £31150 @ 22%, and only after that is income taxed at 40%.

Hi John,

I was just making a simple calculations and I am aware of the Personal Alloweance (Standard Deduction in US). But what I am trying to find out is if I CAN get the standard child tax deduction, mainly for the Child Tax Credit, which is 10% since I have a child. But it seems that HSMP applicant can NOT get this benefit.

On a side note, I do understand that an approved HSMP applicant can't use many public funds that are offered, such as disability comp, etc. However, I think tax is different matter and I should be entitled to any tax credit (Child Tax included) for which I am qualified for. But I am no UK tax expert and I certainly don't want to jeopardize my HSMP visa if I file for Child Tax Credit and the HO found out.

ANyone who lived in UK under HSMP and have a child, please let me know.

[pateketu]

lanwarrior, can you give a pointer to the document you are talking about

[lanwarrior]

lanwarrior, can you give a pointer to the document you are talking about

Pateketu, it is the standard HSMP Guidance for applicants over 28 years. You can obtain that from http://www.workingintheuk.gov.uk/workin ... o28_06.doc
Refer to Number 8, page 44.

[John]

But what I am trying to find out is if I CAN get the standard child tax deduction, mainly for the Child Tax Credit, which is 10% since I have a child. But it seems that HSMP applicant can NOT get this benefit.

Just looking at the income tax system in isolation, there are no allowances for children! And that is nothing to do with your immigration status, it applies to everyone.

But you are right to point out that there are things like Child Tax Credit, although I don't know where you get your 10% rate from, and also Child Benefit. However it is very clear, for example, in para 43 of the document you refer to, that you cannot claim any Public Funds, as defined in para 44 of that document.

Accordingly you cannot claim Child Benefit and Child Tax Credit, even though you have a child in the UK.

However you may have noticed that the definition of Public Funds is quite a limited list, and it certainly does not include all possible types of "benefits" from the UK Government. Accordingly, for example, it is totally OK to send a child to a state school, and make full use of the NHS. It is also the case that the definition of Public Funds includes nothing that is maternity related and thus all benefits relating to maternity can be claimed with no problem at all.

A final point, from what you post you are from the US. You are making comparisons between USFIT and the UK income tax system. Fine but in reality it will serve no useful purpose ... they are very different .... tax systems are not so much right or wrong, but simply different. If you want to continue your education on the UK tax system, there is lots to see on the www.hmrc.gov.uk website.

[lanwarrior]

Hi John,

I got the 10% child tax credit from the link that you provided http://www.hmrc.gov.uk/rates/it.htm.

Yes, I made comparison with US tax because it seems that the Child Tax Credit, be it in US and UK, are the same in that I get some tax deduction for ahving a child. However, if I can't get that for sure, then I wouldn't include that in my UK tax filing.

But now that I think about it, how would UK Immigration know if I claim Child tax credit? LOL! Just kidding.

However you may have noticed that the definition of Public Funds is quite a limited list, and it certainly does not include all possible types of "benefits" from the UK Government. Accordingly, for example, it is totally OK to send a child to a state school, and make full use of the NHS. It is also the case that the definition of Public Funds includes nothing that is maternity related and thus all benefits relating to maternity can be claimed with no problem at all.

This is interesting. Is there any way I can find the complete list? I just want to be 1000% sure that if I claim some public funds benefit while in UK, I won't jeopardize my HSMP benefit and get kicked out of UK. Not that I want to become a leech in UK, but it's hard to know what I can or can't claim.

BTW, John, are you living in UK?

[John]

I got the 10% child tax credit from the link that you provided

On that page the only mention of 10% is for the Starting Rate .... the first £2150 of taxable income being charged at 10%. Nothing at all to do with Child Tax Credit.

Definition of Public Funds? That is in para 6 of the Immigration Rules ..... click here.

My location? Fully disclosed on every message I post! As you read this, look towards the left of the screen .... Birmingham, England.

But now that I think about it, how would UK Immigration know if I claim Child tax credit?

Let's put it this way, on the application form there is a question that reads something like "Are you subject to immigration control?" and if both you and your spouse/partner answer "Yes" to that then you will not tend to get the Child Tax Credits. And if the answer is wrongly "No" and you end with getting that benefit, well not recommended .... a fraudulent claim ..... not recommended .... liable to end up in Court being prosecuted! Now I fully realise you were jesting about that, but seriously, not a good idea! Especially as when you try to renew your UK visa you might encounter serious problems.

[lanwarrior]

Let's put it this way, on the application form there is a question that reads something like "Are you subject to immigration control?" and if both you and your spouse/partner answer "Yes" to that then you will not tend to get the Child Tax Credits.

That's something that I would never know, unless pointed out by someone who live in UK and have filed tax.

Damn, so that means I can't claim Child Tax Credit for the next 5 years.