Can't afford the payrise offered

[Agwen]

I feel very lucky to have a job that hasn't been impacted by Covid, and appreciate that I'm in a much more fortunate position than many at present. My employer offers a pretty much guaranteed payrise every year that isnt quite at inflationary levels, but not too far off. The next time this happens it will just tip me over the £50k point and I will lose my child benefit- as a single parent of 3dc this pays for the breakfast club and after school club that allows me to work.

I am losing sleep over what to do when the time comes in March and my boss hands me a letter with details of a pay increase that I can't afford. It will mean an extra £30 ish in my pay every month after tax but lose me £180 in Child benefit.

I don't know what to do, I am so worried that I can't think properly :(

Thanks @ivfbeenbusy - I’ve actually already got a self-assessment account as I used to be self employed. Haven’t had to use it since 2018 but I’m sure I can get it out of mothballs! I’m not starting the job until December so assuming it’s the same as the standard self-assessment and won’t need doing until October-ish 2021?

As others have said, if you already pay into a pension through your pay your relevant income for CB purposes will probably already be under the threshold and if it isn't consider adding more to your pension to bring it under. If under the threshold no need to do any form of self-assessment.

If you do online it's January but if you want to claim back through next years tax rather than pay a lump sum it's December.

Another option is to reduce your hours. Makes a big difference to home life one earlier finish.

Loads of options for you...

As previous posters said it's a sliding scale so you won't lose all of it at all. Plus it's not like they actually stop giving you it, you just do a self assessment tax report and then a proportion Is clawed back the next year via your tax code. It should never leave you net worse off.

For long term planning you could also increase pension contributions to take your net pay down to 49,999 which would absolve the issue. OR drop a couple of hours work so you are pro rata below £50k.

All in all it's nothing at all to lose sleep over don't worry

@TW2013

They don't let you know Coffee so you have to remember. Do check though if you need to do it this tax year.

Exactly, and they don't take "I didn't know" as a reason either . It's not well publicised these days so plenty of people do get caught out.

The no brainer would be to accept the pay rise, we're halfway through the tax year so it would have to be a mighty fine raise to make you go over 50k in 6 months and it's likely to be offset by your pension.
Next year, keep an eye on your pension % to ensure you keep your pay rise and CB. Win win.

Thanks all for your helpful advice. I need to take better control of my tax situation and this is just a small bit of it- I was doing the classic ostrich by panicking but sticking my head in the sand and not actually sorting it out. Much appreciated boot up the bum from this thread

@Agwen

Oh wow! Really? I didn't realise- I thought it was a case of £49,999.99 = CB, £50,000 = not a penny of CB

How does it happen, do I have to declare something to the child benefit people or does it happen automatically?

This will make such a difference to how much I sleep

It’s so nice to see people get good news on mumsnet, congratulations on your pay rise I hope you celebrate it.