Child benefit and earnings

[latte101]

Hello all

My husband is starting a new job next week which takes him over the £50k threshold of being entitled to child benefit. I am currently on mat leave but returning to work next week and will be earning around £12k. Does anyone know when we need to inform child benefit to stop it?

Thank you

Don’t stop it yet. There’s a sliding scale from £50k to £60k, pension contributions reduce the taxable pay so could take the ‘pay’ lower. And also his total pay for this tax year is presumably lower than the new salary (as started mid year).

Maybe next tax year once his taxable pay is clear, and if above £60k, you might want to stop it.

Personally I claim it, save it for a year, and pay it back through self assessment. Feels like I’m getting one over on HMRC (petty).

@RandomWordGenerator

Don’t stop it yet. There’s a sliding scale from £50k to £60k, pension contributions reduce the taxable pay so could take the ‘pay’ lower. And also his total pay for this tax year is presumably lower than the new salary (as started mid year).

Maybe next tax year once his taxable pay is clear, and if above £60k, you might want to stop it.

Personally I claim it, save it for a year, and pay it back through self assessment. Feels like I’m getting one over on HMRC (petty).

Thank you for this. Very useful. He currently earns £48k and will be going up to £60k. I wondered due to it being halfway through the tax year whether that made a difference. Just don't want to be caught out.

If you are worried about getting caught out, after you’ve spent the money, then make a point of saving it until he does a tax self assessment. You are likely to be able to keep some of it as it’s part way through the year and he’s likely to be making pension contributions.

Whereas you’ll definitely lose out if you cancel it now.

Depending on exactly how much you earn, you can give him 10% of your tax allowance, which will allow you to keep a bit more child benefit. You have to be a non tax payer, the allowance is currently something like £12750 I think

The figure for your DH is his 'adjusted net salary' which is, confusingly based on adjusting his gross salary, not his net salary after tax, NI, student loan payments, but based on deducting pension contributions and adding on any benefits that are reported on a P11D, eg a company car.

Anyway, all the info is on the HMRC website. You might find it beneficial for him to up his pension contributions, because he'll get tax relief on these plus you can keep more or all of the CB.

I'm in a similar situation, jumping from 40-70. I'm going to keep claiming for this tax year, save it and pay it back. Then once the next tax year starts I will stop the claim. Just seems easier that way.

Absolutely don't stop in. At all.
Put it into a separate account and don't touch it. If you have to repay it it may not be until 18 months later. We were caught out by this too.

Thanks, everyone. I've shown these responses to him

@BarbaraofSeville

Depending on exactly how much you earn, you can give him 10% of your tax allowance, which will allow you to keep a bit more child benefit. You have to be a non tax payer, the allowance is currently something like £12750 I think

The figure for your DH is his 'adjusted net salary' which is, confusingly based on adjusting his gross salary, not his net salary after tax, NI, student loan payments, but based on deducting pension contributions and adding on any benefits that are reported on a P11D, eg a company car.

Anyway, all the info is on the HMRC website. You might find it beneficial for him to up his pension contributions, because he'll get tax relief on these plus you can keep more or all of the CB.

I need to look at my exact earning figure to see if I can pass on that marital tax to him, I work for the NHS and my pay needs to be adjusted to account for my reduced hours.

This has been very helpful, thank you. The HMRC website is as clear as mud.

Even if you opt out of the money still keep the national insurance contributions and if you don't claim it then your child might not automatically get their own NI number at 16.

We had the same situation covering the last tax year. In April I filled out the necessary form online and was told I'd get a hard copy form in the post. I'm still waiting. I knew there was a long wait but this seems crazy. I'm sharing this so you're aware as I find the wait stressful! Not sure it it's normal.