Child benefit tax

Yes I'm aware I'm as not financially savvy as I should be.
It's a bit complicated really. I'm not lazy I worked and paid my own way until we got married, but as I rented couldn't afford to get on the property ladder. He is older than me so the mortgage I.e. is in his name. I am actually going back to work for 15 hours a week soon as a carer in the NHS. I was aware of the 50k threshold but was told he earns 45k, so I wasn't completely naive. I have no access to his money he has his own account so I genuinely didn't know. If he dies he has life insurance.

I have posted on here a while ago about my concerns around his control of the finances (not sure under which name) which explains it all a bit more. But thanks for your concern.

yep this all started years ago my kids in their 20s now. One other thing that was not clear is that you only get the NI credits until children are 12 years old.

OP - I really hope you take this learning experience as a slap with a wet fish eye opening you needed.
You cannot afford to be a sahm and this ignorant about financial affairs. What if he drops dead? What if he divorces you? Your ni/state pension would have been affected if you'd not claimed it.
For goodness sake get more switched on. Do you know the details of his pension? How would you be financially if he died? Have you got your own pension and if not why not?
Learn from this. Nothing wrong with being a sahm but you cannot be so blaise about the financial element of your life.

You won't need to pay it back. He needs to declare it on his tax form, and will have his tax slightly adjusted. NB that it was clawed back on a sliding scale between 50K and 60K for previous tax years, so if he earned, say, 52 thousand it's still well worth you claiming.

@Tulip2478 your husband needs to fill in a tax return. For the tax year starting tomorrow the threshold is increasing to £60k.

Sorry to piggyback on this post. I'm a SAHM but recieve child benefit. My husband has just informed me the other day that he earns over 50k. I always thought it was 45k, and was aware of the 50k threshold. Looking at these comments, I'm unsure if I need to do a tax return or he does? I know this is my fault but I have no access to what my husband earns because he has his own bank account, not a joint one. My child benefit is really the only money I get so I'm really worried if I have to pay it all back!

Can anyone help at all?

Not sure what CD is, so going to assume typo for CB.

How can she still receive CB on a salary of £60k just because she has the children and is now single? That’s not how it works. That’s exactly why people are saying it is unfair.

Your contributions to a workplace pensions are included!

Student loan isn’t included, use this calculator - https://www.rossmartin.co.uk/income-claims-reliefs/1448-adjusted-net-income

I didn't think it included pension contributions though...so I'm sure you can deduct that from your salary? I think I worked out I'd be able to earn £55k before being unable to claim it.

I could well be wrong though!

Does the net adjusted include student loan repayments or just pension?

If your hypothetical couple split, the the parent who has the children can still have CD.

Single parents receive council tax reduction and can receive higher UC.

Is it fair on couple where both are working if single parents receive more beneficial treatment? Then everybody will be separating.

A couple is on reasonable salaries of £40k each and split childcare responsibilities and run the house together etc. Get child benefit. If someone needs to split and earn more to cover childcare, so might need £60k as a single parent.. now no child benefit. That is not fair. People do stay in relationships they would rather leave because of this sort of thing. Single earner families are looked down upon by this government.

I have to do this as earn over £50k. It is an annoyance but fairly straightforward as most of the info you need will be on your P60. Important things to know.

1. Make sure you keep a record of any giftaid charity giving you do as you can add this into your tax return and it will help reduce your effective income.
2. If you can afford to, consider additional contributions into a work pension as this will reduce your effective income.
3. If you are repaying child benefit via your PAYE tax, make sure you do you tax return early as it can change your tax code.

If you are on over £60k then my understanding was that you are supposed to get no child benefit so claiming it and paying it back would only have a benefit if you can pop it in some form of high interest savings or similar.

Of course it is massively unfair as it penalises families with uneven income between partners. This is a key argument against reforming or scrapping it especially as the thresholds have been frozen so more and more people are getting hit with this now.

I recall that HMRC have lost a number of cases where people have successfully claimed that the government had not done enough to inform them of this liability when their income went up, but I suspect that defence is less likely to fly now.

It may still be worth claiming it as its £60k after pension contributions, so you will probably still keep a portion of it. But I would put it into a savings account so it’s a not a chore to find it at the end of the year when time to repay it.

But @hellonnme isn't talking about the NI credit she's saying the grandparent gets the money and the higher earner doesn't pay it back because they live at different addresses

I thought the grandparent thing was more around taking the NI credit if doing the childcare and the child benefit claimer did not need it. Didn't realise they could claim in their own right. Surely loads of people would be doing it?

This is nonsense.

If the grandparent has child caring duties because the parents are working then the child benefit NI credits can be transferred.

https://www.countytimes.co.uk/news/23038239.martin-lewis-highlights-benefit-grandparents-can-thousands-pensions/

Edit: to insert ‘NI credits’

The grandparent loophole is widely known. Many people use it if both parents are working (and therefore their NI is covered) as a way for grandparents getting NI credits. I also happen to think this is ethical in cases where the grandparent has given up work to look after the grandchild.

The thing people are missing is that the higher earner still needs to pay it back via their tax return, regardless if who actually receives the payment of the benefit.

I've never heard of a loophole for grandparents to claim child benefit, but they can claim the subsidised NI credits towards their own pension if they are below SPA and don't have enough years in their own right.

Women who care for young children or other relatives are giving society a lot of support as otherwise the cost to the state would be higher (I know not so much with childcare but it is becoming more as more childcare becomes subsidised. I know that's a whole other topic) also maybe they don't need to claim some other benefits if lower income. Like working tax credits.

How does this work? Someone not working or paying tax is using the NHS, roads, education for their children and all the things that tax pays for, whilst looking after their own house and their own children, which working parents do as well as work and pay into the system. There is a big difference if the child (or other person being cared for) is ill or disabled, but healthy school age children are not 'looked after' in anything like the same way. How does being in the house when the children are at school give society a lot of support?

I also don't understand the argument that it is 'unfair' for a family with two people working and paying tax/NI who pay for commuting, other work expenses and are probably paying childcare costs too to have a higher threshold for losing CB than another one who can afford for one parent to SAH and thus not contribute anything. The SAH family won't be paying childcare, commuting etc either. It seems to me perfectly fair that the working couple should get more CB than the SAH one.

Because it doesn’t work. It’s still repayable.

I'm really interested in the grandparent thing, it's not something tid need to take advantage of but I'm amazed that if it's the case I e never heard of it.

I keep up with consumer finance, listen to Martin Lewis etc and never seen it mentioned until today

Why isn't the loophole more widely known about?

I'm a sahm to a high earner so my mum makes the claim - she contributes to the dcs more than the amount of child benefit which means she can claim even though she lives next door. Not affected by DH's salary as it's a different address.

This is batshit. Even if there is a loophole, you must know it's an obscene thing to do. You and your DH earn enough for you to be a SAHM and you don't need the benefit, but your mum claims it anyway. You know this isn't what it's for. So what if your mum contributes to her grandchildren - that's not for the state to reimburse her and no doubt she can afford to as she's living next door to a high earner so isn't short of a bob. Clearly that rule is not there so that any high earners can outsource their benefit to someone who treats their grandkids. Jesus wept, the morals of some people. This loophole needs closing.

I knew, and I was a SAHM for a number of years, and we paid them back so we can get the pension credits.

It was a MAJOR news story for quite a long time because of the inherent unfairness of it all.