Child benefit higher rate tax payer

[Nc4post99]

So my hubby just got a new role, v proud of him it’s long awaited. It pays £55k, £10k increase.

We’ve just had our second child so claim child benefit for 2.

I’m on mat leave, but when I’m in work I’m mid £30k, desperately need a new job when I get back but that’s irrelevant here lol.

What does this mean for CB, I know he’s a higher rate tax payer or at least he will be when he starts in June. I googled and it says something about a self assessment tax return and you pay some of it back? But this is virgin territory for me. Could someone explain for me please? :)

Side note it does seem a little silly/ unfair that it’s on sole income not joint. Family could be a single income house hold and then they are obviously worse off than 2 parents earning £35k each.

You can keep your claim and then your dh registers for self assessment and would have to pay some of the CB back. It's 10% per extra £1k so about 50% would need paying back.

There another thread discussing some of this already.

If he pays more than £5k a year into his pension you won't have to repay anything.

If he doesn't get the higher wage until June then it's after the current financial year so wouldn't need to do anything immediately.

@dementedpixie

You can keep your claim and then your dh registers for self assessment and would have to pay some of the CB back. It's 10% per extra £1k so about 50% would need paying back.

There another thread discussing some of this already.

Oh is there? Didn’t see that one. I’ll have a mooch

He will need to register for self assessment. There’s an online SA1 form. He needs to set up a government gateway account to complete the tax return online.
Regardless of who receives the child benefit the higher earner has to declare and repay some/all of it via self assessment.
Always worth claiming, especially if you only repay part of it.
Claiming child benefits also means your children will automatically be issues with a National Insurance number.
Bear in mind the benefits such as a company car or medical benefits paid for by his company count as income. If the higher earner earns too much to keep any of the child benefit then you can claim it but opt not to receive it. This means your children still automatically get their NI numbers.

@over2021

If he pays more than £5k a year into his pension you won't have to repay anything.

Oh really? Didn’t know that. I’m guessing that’s just employee contributions?

Thanks @gillybean2 didn’t know this. The company he’s moving too is really good in terms of health insurance and benefits like protection, no company car though. So it’s the whole salary package? I’m not sure how much he puts in a pension atm or will put in when he joins

Just to add, you can still register for child benefit but opt not receive payment. This is what I’ve done as quite frankly I couldn’t be a*sed doing the def assessment every year. It keep your child registered for the NI card and all that jazz but saves the admin if you are going to have to pay back all.

Annoyingly for the first couple of year I kept taking the payments as it was a March bonus that would push me over. So I never actually knew if/by how much I’d be over. But it just became an admin burden for me.

At 55k how much of it are we likely to pay back?

Does it take into account our household income as my salary is pretty average

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

I already said its around 10% per extra £1k so at £55k he'd pay back 50% of it.

It is based only on the higher earners income

@dementedpixie

I already said its around 10% per extra £1k so at £55k he'd pay back 50% of it.

It is based only on the higher earners income

Blame baby brain

As pp says he should just up his pension contributions to keep his post-pension total just under £50k.

You pay back 10% of the CB for each £1000 earned over £50k by one individual. No, there is no adjustment made according to what (if any) the other partner earns. The rule applies the same for any household where one adult earns more than £50k regardless of whether there's another high-earning adult, another adult with low or no earnings or no other adult at all.

It's not very fair no, but it has to be a system that is easy and cheap to administer and anything fairer than this would be likely to reduce the uptake among the poorest families, to the benefit of comfortably-off families.

But anyone in the £50k-£60k bracket can get around it with pension contributions and other salary-deduction schemes so you don't have to lose out on anything.

Your income is irrelevant.

He will need to complete a self assessment after next April using the details on his p60. If he puts 5k into his pension so his pre tax income is 50k then no charge. Otherwise it's 10% of the benefit per 1k over 50k.

Anything over 60k and you have to pay the whole thing back. At this point you change the claim so you get NI credits but don't receive the money.

Keep in mind, bonuses & benefits in kind also count so he'll need to see his p60 to understand what the total payback would be.

@stackhead

Your income is irrelevant.

He will need to complete a self assessment after next April using the details on his p60. If he puts 5k into his pension so his pre tax income is 50k then no charge. Otherwise it's 10% of the benefit per 1k over 50k.

Anything over 60k and you have to pay the whole thing back. At this point you change the claim so you get NI credits but don't receive the money.

Keep in mind, bonuses & benefits in kind also count so he'll need to see his p60 to understand what the total payback would be.

There’s bonuses in this role too, thanks for pointing that out!

Seems likes it’s next tax years problem though? Shouldn’t be too bad then as I’ll be back in work

If you have opted out of receiving child benefit as salary over 60k, do you still have to do a self-assessment each year?

Or can you not both, and just let the tax etc be deducted monthly by PAYE, even if you have a car allowance etc included in the package?

@SonicBoomBoom

If you have opted out of receiving child benefit as salary over 60k, do you still have to do a self-assessment each year?

Or can you not both, and just let the tax etc be deducted monthly by PAYE, even if you have a car allowance etc included in the package?

No. If you've opted not to receive payment then no self assessment is needed.

Thank you stackhead.

@Nc4post99

At 55k how much of it are we likely to pay back?

Does it take into account our household income as my salary is pretty average

I earned 54 last year. 1 child. Gained 1.1 in child benefit. Return 600

If he starts on 1st June you can work out how much he will earn next year. April and may at current rate (less pension employee contributions). Add 10 months at new rate less pension contributions. It may be that he is below the 50k, or he can up the pension to ensure he is under.
Any charity donations can be offset too.

53333 I worked it out at assuming 1st June start date. So does he pay more than 278 into a pension each month?

@SonicBoomBoom

If you have opted out of receiving child benefit as salary over 60k, do you still have to do a self-assessment each year?

Or can you not both, and just let the tax etc be deducted monthly by PAYE, even if you have a car allowance etc included in the package?

No you don’t, but you need to call HMRC to remove your self assessment flag from your account. I’ve just had to do this as It kept reminding me to do one even though I didn’t receive CB anymore.

@Nc4post99 you are correct it next years problem, but whatever action you take now will determine how big that problem is! If you cancel now you’ll have less to payback. But you could always keep receiving and hedge your bets that you’ll fall below 60k inclusive of bonuses and only have to pay some of it back. I had a bill of £1400 my first year because I didn’t know.

Be very careful if you decide to claim it. When we had children we started claiming it (partner was on salary of over £50,000) we were putting the monthly benefit we received into the children’s Isa’s we had set-up for that reason, and we knew partners tax code would increase whilst claiming it. I didn’t go back to work after maternity leave finished. My partner wasn’t self employed and was paid wages through normal means by his company. We were lead to believe that his tax code would be adjusted to a higher code automatically due to us receiving this benefit. Five years after we had started claiming CB, he received a letter from the tax office saying he owed them £15,000! Apparently you have to fill a self assessment form in due to claiming this. When he questioned why they had only contacted him after five years, they said it was his responsibility to keep up to date with his tax assessments, (which he didn’t have a clue he was supposed to be filing out each year). He was being charged daily interest on the outstanding arrears which went into £1000’s! It was shocking! Obviously we stopped receiving the benefit when all this came to light!

Find out how much pension he’s paying though, gross maybe 55 but he will almost certainly be enrolled into a pension with them, if it’s a decent one it could take him below 50 and then all this is not required. Find out the employee pension contribution

Yeah it’s totally stupid @Opsiedaisy because two of you can earn 50k and have it all but if one earns 60k you get none which is ridiculous. Household of 100k=full chb house hold of 60k(one earner)=none. I’ve just cancelled mine because it’s such a headache I’m essentially getting money from
Him through the government…