Child benefit self assessment form

[jollyholly3]

Hoping someone can help clarify who has experience with this. January 2023 DH got a pay rise from 40k to 52k. From then we set up a separate account for the child benefit to go into so that if we had to pay it back, the money would be there. I asked him about doing the self assessment form the other day as heard it needed to be done by end of Jan. When he's had a little look he reckons he doesn't need to do it until next Jan 2025 though because he won't get his new p60 until April, so his current one says he earnt just over 40k. Is this correct, as it didn't sound right to me but neither of us are fully clued up on this and don't want to be penalised for not doing it if he should.

If you’re wrong about this then we’re both wrong as I operated on the same assumption last year. I’m not writing this from prison so 🤞

Current tax assessment is for the April 2022 to March 23 tax year.

Then the 2023-24 year firms are later this year.

Did you also go from under threshold to over? He would have earnt a bit more than 52k due to overtime. We've been looking at booking a getaway for DS birthday and this money could go towards that but I don't want to spend it and then realise we do actually have to pay it back.

So it's correct that he won't actually need to do a self assessment form until next Jan 2025 and we don't need to pay back the money we had saved? All this kind of stuff is like foreign language to me.

Why doesn’t he salary sacrifice the extra £2,000 into his pension so you don’t need to worry about it at all?

Remember its the taxable income... so pension contributions and some other bits are removed before they work out what he ends to repay.

And its only part of it... so £52 would be paying back 20% of the child benefit.

This is definitely something he is looking into doing as someone mentioned it recently to him, again something that just needed to be looked into more but will be worth it going forward.

You need to think about the total amount earned in a year rather than his actual current salary.

Tax year runs from April - March. Given that he only got the pay rise in January, he won't be over the 50k threshold for the year 2022 - 23. He will have earned 43k in total for that year. No need to do a tax return, or pay back child benefit.

April 23 - March 24 he will earn 52k in total so will need to do a self assessment tax return (by January 25 latest, but could do it any time from April 24) and there will be a small amount of child benefit to pay back. £200 I think.

If he had a payrise to £52k in Jan 2023 then it is likely that his income for 2022-2023 (6 Apr 22 - 5 Apr 23) would be less than £50k (you said his P60 confirms this). So no High Income Child Benefit Charge or tax return due.
The 2022-2023 tax return is due by 31 Jan 2024.

For 2023-2024 (6 Apr 23 - 5 Apr 24) it sounds like he will exceed the £50k (although consider impact of pension contributions, as others have said), so a tax return will be due.
The filing deadline for the 2023-2024 return is 31 Jan 2025 - but he can register, and then file, from 6 April 2024. He doesn't have to pay the tax until 31 Jan 2025 but I'd recommend filing as soon as he can. He may able be able to pay the tax trhough his PAYE coding rather than a single payment. There is a tick box on the tax return for this.

That's helpful thank you. So we will continue putting the money aside, and then whatever we don't have to pay back for the next self assessment we can save. But from the money we have been saving since early last year, he won't actually need to repay any of that, since we won't need to pay anything back until next January 2025 and by then we will have all of this years child benefit saved? I'm going to sound really thick, apologies. It makes sense what I'm trying to say in my head!

Yes pretty much.
Child benefit paid to you for the year April 22 - March 23 is yours to keep.

Child benefit paid to you between April 23 and March 24 you will have to pay back a little.

Think of April as your deadline though. That's when you should do your return and you'll get your bill then. You don't have to pay that bill till January but the bill is still created then.

He can go online at any time and see his tax breakdown using his NI number. That might be a useful place to start then you will see what is 5th April 2023 p60 says which is the current relevant one for tax returns due this month. But also where he is at for the 5th April 2024 one so far - which will enable decisions like pension contributions which will need to be made prior to 5th April in order to qualify.

I agree with pp and what you've said. If his P60 for 2022-2023 has his total income at £42k, then you won't have to pay any of it back from that period.

It’s what I did back when I still worked FT, and it added up quickly, which was great!