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C benefit - help - self assess or stop the benefit?

(22 Posts)

We will be losing entitlement to the CB next year as DH is earning over £60k.

I am a little suspicious of the assurance that my NI contributions record (as a SAHM currently) are truly protected if I do this - should I set aside my doubts to save DH the hassle of registering for self assessment and me doing an annual tax return?

I wish the leaflet was a little more detailed. Not kicking off about losing the money just genuinely curious as to what others in my position are doing? Cheers.

When I say "if I do this" I mean 'if I stop the benefit payments outright' - I deleted part of my post sorry!

CogitoErgoSometimes Wed 07-Nov-12 15:57:05

I don't know the specific answer about the NI contribs but I've done SA for several years and it's really not a big deal. Takes a while to get registered and password set up for the HMRC portal but I spend a few hours one weekend a year with a cup of coffee, P60 and P11D and usually end up with a rebate.

Thanks Cogito - I am sure I could do the return on DH behalf as 'payment' for not having to cancel CB maybe we shall do that for next year at least and see how it goes - withdraw if it is more hassle than it is worth. So if I do opt to retain the CB will we need to do a return for this tax year? It doesn't appear so looking at the letter DH received??

pepperrabbit Wed 07-Nov-12 16:13:59

When did you get your letter bigmouth?
We've had nothing in the post and will lose ours.
I have no idea what to do either sad

AndIfATenTonTruck Wed 07-Nov-12 16:22:26

I earn way under the 50k threshold, DH earns over the 60k. I am going to keep claiming because:

If he was unemployed for anything more than a couple of months we would be back under the threshold, but I bet we couldn't start a new claim.

If I was unemployed this would amount to my NI stamp (I am aiming to future-proof against policy changes)

If DH died...

MrAnchovy Wed 07-Nov-12 16:39:14

I'd go for the tax return - unless you have income which you are not currently declaring (dividends, interest etc.) you cannot lose out, and you may well get a refund - top four things to check:

Pension contributions - if you are in the kind of scheme where you pay tax on these and it is reclaimed by the pension provider (quite common for freestanding AVCs, but also some ordinary occupational schemes) you may be owed thousands;
Business mileage - if you are reimbursed less than 45p per mile (up to 10,000 miles) you can claim the difference as an expense;
Professional subscriptions - look at list 3;
Charity donations and subscriptions - anything paid as Gift Aid you can claim 25% back.

An accountant can help you ensure you are not missing out on these and other reliefs.

will we need to do a return for this tax year?

Yes, the new arrangements start on 7 January 2013 so 13 weeks fall into this tax year.

pepperrabbit Wed 07-Nov-12 16:40:18

Can I ask a stupid question?
If I keep claiming does DH get his tax adjusted monthly so we'd get less each month by the equivalent amount, or do I receive it and we get hit by a tax bill each year to pay it back in a lump sum?
I work part time earning just enough to cover childcare a nominal amount, he's just over the £60k threshold.

Got the letter today pepper

AndifI yes all good reasons to retain CB claim for our 3 children. Until I saw the letter I assumed that we would be doing SA tax route as I had no idea there would be another option that recorded the NI contributions for pension purposes etc.

MrAnchovy Wed 07-Nov-12 16:44:13

...but I bet we couldn't start a new claim.

You will be able to, and they are changing the rules so claims can be backdated if you only realise after the end of the year that you would not have been subject to full clawback.

But why expose yourself to that when you can just keep claiming and keep the money in the bank for up to 21 months (you won't have to pay the clawback for CB received in April 2013 until the end of January 2015)?

tribpot Wed 07-Nov-12 16:47:24

I got the letter this morning. I obviously didn't read it carefully enough - it offers an alternative to self-assessment that still protects the contributions for pension purposes?

Doing a basic self-assessment really is a piece of piss, I already do one for DH every year. The main thing is to keep all the paperwork where you can find it, so this is my main headache. But for my own return I think I would basically need the P60.

MrAnchovy Wed 07-Nov-12 16:53:06

If I keep claiming does DH get his tax adjusted monthly so we'd get less each month by the equivalent amount, or do I receive it and we get hit by a tax bill each year to pay it back in a lump sum?

The second one. You will have to pay back the first 13 weeks up to 5 April 2013 by January 2014. It is possible that your tax code may be adjusted at some time in the future so that you pay it back each month, but I suspect that HMRC have realised that they may not be able to do this under existing PAYE legislation.

MrAnchovy Wed 07-Nov-12 16:59:09

I got the letter this morning. I obviously didn't read it carefully enough - it offers an alternative to self-assessment that still protects the contributions for pension purposes?

Yes it does, this was always part of the plan but unfortunately a certain section of the press got carried away and went around scaremongering as usual, diverting attention from the real issue which is not that you lose NI credits but that you have to jump through hoops if there is a change in circumstances.

Doing a basic self-assessment really is a piece of piss,

Exactly. Much easier than remembering to make a backdated CB claim when you are in the middle of a separation or bereavement.

But for my own return I think I would basically need the P60.

It is the higher earner that must include the clawback on their tax return, so you only need to do it if you earn more than your DH.

tribpot Wed 07-Nov-12 17:05:33

Thanks MrA, I am the salary person in my house - my DH has a small income from a rental property, which is why the Self Assessment website and I are good friends although only on 31 Jan every year when my good intentions to do the return well before the deadline inevitably fail confused sad

So it's my 'excessive' salary that would be destroying his pension rights unless I do something, which I take to be 'claim the Child Benefit but ask not to be paid it' from reading this.

However, I'm more tempted to go down the self-assessment route as I would find it hilarious if it turned out I could claim more back in tax than I'm losing in CB, whilst creating work for the government (and yes I do know it's not HMRC's fault - I also have to implement ludicrous government policy for a living) and still protecting DH's contributions.

Bramshott Wed 07-Nov-12 17:11:50

So in our situation - I am SE low-ish earner, DH over £60k and ALREADY does a tax return (doesn't everyone on HRT who contributes to a pension or gives to charity?) we are better to keep claiming in order to (a) protect against a change in circs; and (b) get the interest on the money before paying it back - is that right?

MrAnchovy Wed 07-Nov-12 17:51:09

... is that right?

Yes grin

pepperrabbit Wed 07-Nov-12 18:10:59

Thanks MrA, neither of us has ever done a tax return before so it just sounds a bit daunting, but it sounds like that's the most sensible thing to do, just ensuring to keep the money separate.
Which is a whole different thread as I've no idea how we'll cope without it.

tribpot Wed 07-Nov-12 18:12:28

If you register to do it online and leave yourself plenty of time, it's pretty well laid-out and easy to follow. Thinking about it is much more daunting than doing it smile

pepperrabbit Wed 07-Nov-12 18:16:36

smile like most things then!
Will I have to do a return as well? I'm the one who pays the professional subscriptions etc but as I only work 2 days I'm clearly a very much lower rate tax payer!
It sounds like sour grapes, but I really don't see that this is actually going to save the country that much money hmm

tribpot Wed 07-Nov-12 18:31:48

I think it's the person they are going to claw the payments back from who has to do the return. If you have subscriptions that should be offset against your own tax liability (remembering that of course tax is a personal liability and not shared, despite the fact that CB is stopped based on a single income breaching the threshold within the household but not the household's combined income - quite simple) I think you probably should do a return of your own anyway?

I also don't see this saving a great deal of money. And given the amount of money in lost revenues due to large corporations not paying tax, I think the government has a bloody cheek, quite frankly.

CogitoErgoSometimes Thu 08-Nov-12 07:35:24

I always recommend a personal taxation software package called 'TaxCalc' link. You can do up to 12 returns on one package so I share mine with my pensioner parents and even they find it easy to file the return.

Bramshott Thu 08-Nov-12 09:18:22

Thanks Mr A!

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