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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to not understand the new Child Benefit rules on Higher Income

57 replies

Summeblaze · 20/01/2016 21:18

Its just so confusing. DH and I filled in a tax return a few weeks ago as this year he fell into the Higher Income bracket for Child Benefit.

We went on to the site tonight to fill in one for the previous year (see previous thread) and it says on the top line "you have nothing to pay" and then underneath says we owe nearly £2000. Kind of contradicts each other and offices are closed til tomorrow. Will they take this off next years tax or do we have this to pay.

Anyone else already done this and can shed light on the procedure.

OP posts:
SaveSomeSpendSome · 20/01/2016 23:04

No pension contributions only NI.

Dh earns between 30-40k.

We are both self employed.

TannhauserGate · 20/01/2016 23:07

SSS- you don't pay tax on child benefit.

Surely they can't tax me on it, when DH has to pay it back via his tax return?

MsAdorabelleDearheartVonLipwig · 20/01/2016 23:10

MrsFrankRicard - thanks, I don't know if he knows but I'll tell him.

He does pay an enormous pension, perhaps we can look into increasing that.

Might be cheaper to get an accountant. Be a lot less bloody stressful.

Stickerrocks · 20/01/2016 23:11

sss You definitely will have to pay back the full amount of child benefit received as you have earned over £60k. The amount repayable is tapered if you earn between £50-60k. I agree that you & your accountant have your wires crossed somewhere along the line, because the overpaid CB is recovered through your tax charge for the year.

PitBlackwell · 20/01/2016 23:14

The 2 data deadline is ridiculous. I didn't know about the first deadline. I'm not sure H does either. Crap. I hate this.

PitBlackwell · 20/01/2016 23:14

*date

Stickerrocks · 20/01/2016 23:16

msadorable I'm an accountant & I just love everyone passing their stress over to me at this time of year. I finished work just over an hour ago & came onto MN get away from it all!

redstrawberry10 · 20/01/2016 23:35

OK. can someone walk me through this? How do you figure out if you are supposed to pay this back?

I assume all the details are in ones p60?

browneyedgirl1974 · 20/01/2016 23:42

Watching with interest. Dh nows earns just under 60k (was higher) so I have reinstated child benefit. Also pays 3k into pension so guess we will have to pay back most of it.

Gazelda · 20/01/2016 23:47

Hmmm. DH earns 60k today, but was on 40k for most of the tax year 2014-15. He was made redundant and received a redundancy payment including payment in lieu of notice period. Would that count as income? I guess it does, in which case his income will be about 51k for the year, but he also paid out for childcare vouchers.
He's out of the country at the moment, so I'm frantically trying to register him for self assessment, will be a bugger if we're too late. Sad

redstrawberry10 · 21/01/2016 00:08

ok. I did a self assessment computer thingy.

What I don't get is what tax year does this apply to? What I did was take the tax forms, removed pension etc all the way up to Dec 31 2015 (because those are all the pay slips I had).

however, when I entered this all into the self assessment, it said that I should register for self assessment by october 2016 (yes, 2016). is that right?

redstrawberry10 · 21/01/2016 00:12

My situation (actually DP) is that the pay (as stated on the P60, April 2015) was a hair under 50k (that's what the gross pay on the p60 was listed as, but pensions have already been taken out).

I put that in to the 2014-2015 year self assessment and it said no taxes.

Then I put in this year's amount pro rating since I only have the slips until 31 Dec 2015, and it said for 2015-2016 we owe 600. The amount isn't the problem (we can pay it). But when do we have to pay it?

Ellypoo · 21/01/2016 00:18

Tax returns for the 2014/15 tax year are due by 31 Jan 16; return for the current tax year (15/16) is due by 31 Jan 17.

Hth Strawberry

NeuNewNouveau · 21/01/2016 00:20

Redstrawberry the tax year is 6th April 2014 to 5 April 2015 that needs to be filed and paid by 31st Jan.

gazelda the payment in lieu of notice is taxable but the redundancy pay isn't. The pilon will be included in his P45 figure.

You are likely to be too late to get registration through now in time to file by 31st.

redstrawberry10 · 21/01/2016 00:27

Redstrawberry the tax year is 6th April 2014 to 5 April 2015 that needs to be filed and paid by 31st Jan.

did I read correctly, that's last year's taxes? Yay! Good news at midnight is always welcome.

I think, however, we have over received for the 2015-2016 tax year, since we stopped payment in october but the income jump occurred earlier. I take it, then, the self assessment was correct and we have to register for self assessment by Oct 2016 (for the 2015-2016 year), and pay the money back by 31 Jan 2017? Correct?

I have also read, that contributing to pension can knock that back.

redstrawberry10 · 21/01/2016 00:27

thanks to ellypoo too. I just saw that post. OK. all sounds good.

dementedpixie · 21/01/2016 06:32

Only the person entitled to receive the child benefit can opt out of the payment I.e although dh is the high income earner, the child benefit is in my name so it was me that had to go online and opt out getting the money.

www.gov.uk/child-benefit-tax-charge/stop-child-benefit - the link is on this page. You can opt back in at any time if circumstances change

Gazelda · 21/01/2016 09:22

There are some wonderfully helpful posters on this thread. Thank you all (especially neunew.
I'm off now to search through DH's piles of unsorted paperwork to find anything useful in the hope of getting him straight.
Looks like we may be facing a fine for 2014/15 year, but we'll be ready for 15/16.
One more question - as I work and have done so for 31 years with only 6 month break, would we be better to opt out of child benefit?
Thanks again.

Anotherusername1 · 21/01/2016 09:55

It depends. I don't lose all of it so have not opted out as I might as well have the £10 or so I am entitled to each month and then pay the rest back the following year via my tax code. But if you lose all of it I think it's more straightforward to opt out.

LBOCS2 · 21/01/2016 10:07

One other thing which is worth noting with child benefit:

If you're not working and are a SAHP, for the years you don't work but do receive child benefit, you get credits towards your NI contributions, which has an effect on how much state pension you'll be entitled to at retirement age (you have to have a certain number of 'eligible years' to get the state pension or a proportion thereof). Even if your DP earns over the threshold to not be entitled to CB at all, it is still worth you taking it and paying it back via PAYE in the next year because it's the only way you'll keep up your NI eligibility year-on-year, you can buy back in but it's a more expensive way of doing it.

Coffeethrowtrampbitch · 21/01/2016 10:38

LB I thought that HMRC agreed to rate the contributions of Sahm's NI using a different method than Child Benefit entitlement? What you have said was pointed out to HMRC as a consequence of altering Child Benefit, and I'd thought they had had to make alternative provision for crediting Sahm's with NI contributions until their youngest child is 12.

It's of interest to me as dh has just got a job for £58k. He will not earn more than £50k over all before April, so we aren't affected for 15/16, but he may get a bonus and so earn over 60k in 16/17. I was going to surrender our CB but if if effects my NI contributions I'd be better to keep it and fill out the tax return.

Thank you for this thread, lots of knowledgeable people giving good advice, it is greatly appreciated!

LBOCS2 · 21/01/2016 11:20

My understanding was that this is their way of providing those credits - saying that you have to take it and then pay it back via tax, rather than just cancel it.

That was how I read it on the MSE guide, any way. I'm interested too as am about to become a SAHM and DH has recently had a promotion which puts him into this band - I've been to HMRC and they've given me details of my qualifying years so I just need to make sure we do it for the length of time we need to get maximum pension for me, only I haven't actually looked up what that is yet!

Theoretician · 21/01/2016 11:38

Even if your DP earns over the threshold to not be entitled to CB at all, it is still worth you taking it and paying it back via PAYE in the next year

If you are going to fill in tax returns anyway, and are organised/rich enough to have the cash to pay it back, then I agree that receiving it then paying it back is the best idea. It means any changes in circumstance will be taken into account automatically.

However it's not true that you have to receive child benefit payments to get the NI credits. You can now claim child benefit but ask them not to pay you the money. You will still get the pension credits, but won't have to pay the money back at the end of the year. This option makes sense if you think there is virtually no chance your income will ever be less than 60K.

slebmum1 · 21/01/2016 14:05

Can someone please. Parody it's 50k net or gross? I have been going on the assumption of 50k after pension?

slebmum1 · 21/01/2016 14:05

Clarify! Stupid phone.