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Original poster

Child Benefit Salary Cap

40 replies

Lionsleepstonight · 26/12/2019 22:23

DH has had a pay rise, taking him to 52k. I'm trying to work out if this hits the cap of 50k, but not sure if the 50k cap is on earnings before or after the tax allowance. Is the cap on all earnings or taxable earnings?

OP posts:
gh621 · 26/12/2019 22:25

It’s 50k before tax

NeedAnExpert · 26/12/2019 22:26

But after pension deductions.

cabbageking · 26/12/2019 22:28

www.gov.uk/child-benefit-tax-charge

It is on income. ie before tax

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Employment advice
darceybussell · 26/12/2019 22:29

It starts at £50k but it tapers down until you hit £60k, so at £52k you should still be entitled to most of it.

Original poster
Lionsleepstonight · 26/12/2019 22:31

Ok. Great, so if his pension contributions are bring it under 50k, we can still claim, otherwise it's on a sliding scale and a tax return is required.
You wouldn't happen to know if this means he'll pay higher rate tax?

OP posts:
NeedAnExpert · 26/12/2019 22:43

He will. Higher rate kicks in at about £43k.

UhKevin · 26/12/2019 23:05

Higher rate doesn’t kick in til £50k now.

The2Ateam · 26/12/2019 23:08

Does that mean you’re better off increasing pension contributions?

Etinox · 26/12/2019 23:09

Claim even if your dh has to pay it back.

Burru · 26/12/2019 23:13

Still 43k higher rate threshold in Scotland!

But yes if he can increase his pension contributions to bring taxable income down to below 50k you can claim 100%.

fuckitoff · 26/12/2019 23:22

Does anyone know if the same applies with self employed? Dh has earned over £50k for the first time this year (£52k) and we assumed it would go off earnings after he's taken off his outgoings (fuel, tools etc) which brings his taxable earnings below £50k.

Notso · 26/12/2019 23:32

Claim even if your dh has to pay it back.

What is the reason for this if you don't mind me asking @Etinox?

jackstini · 26/12/2019 23:42

Following as I have not been claiming since earning over the threshold but someone has told me if DH claims and then I pay it back in tax, it covers NI contributions for him (he's a house husband)

NeedAnExpert · 26/12/2019 23:44

What is the reason for this if you don't mind me asking

NI conts for either a non-working spouse/partner or grandparent who undertakes childcare

Etinox · 27/12/2019 00:03

@Notso, as pp have pointed out it covers NI. It’s also a point of principal- it’s often the sole ‘own money’ for women, when it wasn’t means tested was stigma free and once it became income based became more vulnerable.

Original poster
Lionsleepstonight · 27/12/2019 10:00

His pension will bring it below 50k already. Not that it was planned, it's just worked out that way.

OP posts:
Notso · 27/12/2019 11:51

Thanks for answering my question, I thought I'd missed something. I claim but have opted not to receive the money so still get my NI and DH transfers me the equivalent from his wages.

margotsdevil · 27/12/2019 11:54

Tax depends on where you live. In Scotland it's still 43k.

Sunnysidegold · 27/12/2019 12:42

Interesting point about the national insurance. I've just cancelled our child benefit. Husband hit fifty k a few years ago but pensions brought it down. However I think his bonus is counted? Turns out we have owed payments for four years but a phone call meant they waived the first couple of years. It's a bit annoyed as I have had tax rebates the past two years which would have covered the amount we owe now.

gh621 · 27/12/2019 18:19

@Sunnysidegold
My husband now earns just over the 60k threshold meaning if we received child benefit we would have to pay the whole lot back in a tax return every January.
Instead we have opted not to receive payments but there was still a claim made to ensure I still got NI whilst I wasn’t earning enough to pay it

Hitmonlee · 27/12/2019 19:30

You need to check re the pensions as it’s a private pension contributions, not a workplace pension. We got caught that way. We thought we were fine. Turns out we weren’t and had to pay almost 5 grand and they wanted it all at once no instalments.

lolawasashowgirl · 27/12/2019 19:47

Does anyone know if you can include childcare vouchers as deductions?

KittenVsXmastree · 27/12/2019 19:57

My understanding is it is based on taxable pay - so after pension deductions, childcare vouchers, and anything elsevtgat comes off before tax.

midwintermorning · 27/12/2019 19:59

it’s a private pension contributions, not a workplace pension how is this different? I want to salary sacrifice my entire part time salary to bring my income down to the minimum required - I have very little pension (I receive annual dividends nearly up to the child benefit limit) but legally I am forced to retain the minimum wage element of m,y salary and then place that into pension at a later date (I hope the workplace pension but I'm not sure). It's all so bloody complicated.

mrsm43s · 27/12/2019 20:02

It's all pensions, including workplace, however the workplace pension will have already been deducted on the P60, so you can't deduct it again.