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Child benefit for 1st time parents?(21 Posts)
Wondering if anybody can help me with some questions about the new child benefit situation?
I am pregnant with my first. I am self employed and do self-assessment for tax and earn less than £50k.
My husband is PAYE employed and does not do a tax return at present. He probably earns more than £50k if we include all benefits and allowances (not sure if we have to do this, do we? there's a car allowance and pension and some kind of shares and he's going to apply for childcare vouchers.. his actuall gross pay is probably under £50k)
So first question:
- What figure do we use for my husband's salary?
Then... assuming that it is over £50k (just).. is it worth us claiming or not? I know we should fill out the form anyway so I get NI credits (though I will anyway because I'm going to keep paying my S-E NI payments as I'm only taking 3mo off completely)... but should we forgo the money? I understand if we ask for the money then DH will have to register for self-assessment (but that'll be easy as he only has PAYE income).... Will we end up paying it all back at tax return time anyway? I don't want to be given money we cannot spend as it'll be claimed back in January...
But... £20.30 a week would be very welcome when I'm off work as Maternity Allowance is pitiful... but it's not much help if it's essentially only a loan until tax return time
I think the message they're trying to send is that if DH earns over £50k then we shouldn't claim because we don't need it...
definitely claim it, even if he has to pay it back later ...
Claim it and pay it back later if you have to. My DH earns 55k put puts 5k in his pension every year so we will get the full amount, if he didn't have a pension we would have to pay back half of it.
What is the point in claiming it each week then paying it back in January?
We don't need a loan for any reason..
[the reason we don't know his taxable income is that he gets shares in a company share scheme... i don't know how these things work... we certainly don't see any money from them and he's not free to sell them.. but i guess they count somehow as some sort of 'income']
because with a while to plan he may be able to pay en extra £5 into a pension that will push you 49p below the limit so you can keep the lot .....
ah right, i see... so you mean claim if we can get his income below the 50? that makes sense... we need to see what difference childcare vouchers will make as they're non-taxable... and I think that will push him below the 50.
the sum we need to calculate is his 'adjusted net income' which involves a better understanding of company benefits (shares) and tax relief on pension contributions than we currently have....
one of the numbers bods at his work will know ....
We are continuing to claim for 3 dc, so CB a lot of money for us. Dh earns over 50k, but from April this year he is paying extra into his pension to come below the threshold. I think net adjusted income is taxable pay, so it's gross pay, minus pension contributions grossed up to 40%. You can also deduct child care vouchers. I think you then need to add back in any other benefits in kind such as car allowance, health care, etc. If you're between 50 and 60k, it's definitely worth trying to reduce your taxable pay through pension contributions, child care vouchers and charitable donations.
I don't understand threads like this where people on high incomes look for loopholes so they can still claim CB.
CB was means tested for a reason, to save money for people who really need it. Just because you can legally claim it doesn't make it morally right.
in a family where 2 parents each earn £49,999 : ie an income of nearly £100k
they still get child benefit for as many children as they choose to have
In a family with one person earning £50,000 and the other a SAHP : ie an income half that of the first family
they do not get any child benefit at all
THAT is morally wrong.
Pearly - my husband is on a high income (maybe borderline £50k, no more, and as I said much of that "money" isn't money but "benefits" including use of a car which he needs and also some kind of shares which don't give us any money and he can't sell.... so it's not like he gets anything like that amount in cash) but I earn relatively little working full-time self-employed for the third sector; charities and social enterprises... and I will be getting only MA while on maternity leave which is only £136 per week.
As Talkin said - two parents earning £49k each would get the Child Benefit so I do think it's worth me seeing if I am entitled to it.
And.... this thread isn't actually about being sure I'm entitled, I won't mind if I'm not if DH does turn out to earn £50,0001 - it's about fathoming out the system so that we don't end up being given money that we then owe back in tax as that would mess up our budget if we've spent that money!!
I think you'll find it's too late to opt out of the CB payment this tax year anyway. I also think, as it's probably over GBP 50k and your DH has a fairly complicated income stream made up of various element, benefits and so forth, he should be submitting a self-assessment return anyway. I would be very surprised if PAYE is taxing him accurately - it never does for me.
BTW... if you claim from when your baby arrives to April 2014 and one of you is earning over the threshold, you will not be asked to pay it all back in one hit. The higher earner's tax code is far more likely to be adjusted so that any repayments are spread out over the 2014-2015 tax year. So very minimal impact on take-home.
Last year I earner over 50K. However, since then ExH has left and I have had to purchase some else out of my business. I will probably earn over 50k this year, but cash flow is shit. So yes I am still claiming CB, but will have to pay it back in 2015 when cash flow will be better. So shot me I get so little other help as a lone parent running my own business employing 17 people I think a small interest free loan from the government is okay.
Cogito - you sound like you know what you're talking about and might be able to help - our baby isn't born yet. I assume we opt-in or out when he is? Or did he have to be born at a certain date relative to April???
His 'net adjusted income' is not 'probably' over £50k, there is just a small risk that it might be 'just' over £50k... and I don't want to risk accepting £20 a week then have to send it all back again in a lump sum.
Also, I really don't think DH can do a better job with a self-assessment form than his work do with his payroll as he doesn't really have a clue how this 'company shares scheme' works.... he'd need to employ an accountant and we really don't want to go there, it'll cost a lot more than anything we might get in CB.
I think we will just not claim at all. My NI contributions are covered by my self-employed contributions anyway and I'm sure we'll be able to get him an NI number when he's 16 somehow.
Well said Talkinpeace Also, Pearly child benefit hasn't been 'means tested'. They've just used an arbitrary cut of point based on the income of one parent in the family. Means testing would have been ok with me if done properly.
If you earn 55k over the year, you'll get to keep half the CB. So unless you think he's going to get a massive increase in pay, claim, but be prepared to pay some of it back the Jan after the april when the tax year ends (ie baby will be born tax year April 2013-2014, so would need to pay back any overpayments in Jan 2015)
as nextphase says, its a sliding scale. Well worth claiming for the first few months, your DH talking to the Payroll bod at work and checking the real numbers.
and bump's NI number has nothing to do with child benefit : its actually allocated the day they are born (like a US social security number) but not issued till they hit 16.
If you start claiming CB in this tax year i.e. before April 2014 then you can't opt out of the 2013/14 tax year.
If you think there's even a chance that he earns over 50k then he should submit a self-assessment form for the 2013/14 tax year and beyond. Any CB to be paid back will happen gradually through a tax code adjustment.
If he is worried about having to employ accountants I would strongly recommend he spends about GBP 20.00 on a piece of personal taxation software called www.taxcalc.com which guides people like your DH gently through the self-assessment form and enables him to file online. My parents, both in their seventies and neither tax nor computer whizz-kids, use this very successfully. All he needs is his end of year payslip, P11D, P60, interest statements from banks, share sales etc.
Leaving CB completely out of the picture, if he is paying 40% tax and contributing to a private pension or donating regular amounts to charity then he is probably paying too much tax. PAYE is great if you earn the same flat fee every week, have no share options, no pension, no perks etc. For everyone else, it's not 100% reliable.
Cogito - I will suggest the he does self-assessment (I do and it's fine but I don't have any weird company "benefits" that I don't unerstand ).
Talkin - the reason I mentioned the bump's NI number is this bit on the form: "Completing the Child Benefit claim form ensures you are registered to receive National Insurance credits which can help to
protect your State Pension and help your child get their National Insurance number."
If you both do self-assessment, that software I mentioned can be used for up to six submissions.
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