To be pissed off about paying back child benefit

[pinotnow]

I am in a sector that was awarded a pay rise this year - though our union is fighting for a higher one. The rise was from September but our school (yes, it's teaching) didn't pay it until November when we got months at once. HR always send us a pay statement at this time of year and I have just opened mine and seen I am now on approx £52k (been teaching 18 years and am head of a core subject in a large secondary school). I understand I now have to pay back some of my child benefit. This is a pisser as things are pretty tight and I'm a lone parent who gets no CM (ex is a total waste of space - I've gone through CMS). Also, I wasn't expecting it this year (I was on £49k last year and now I'm worried I've missed some sort of deadline for paying it back as technically I've been on this for 5-6 months, but only just realised.

I really haven't got the head space for this now and a quick Google has just brought confusion. As soon as you move forwards a bit in this shithole country you move backwards it seems. Any advice would be great!

OP your payslip should tell you what your taxable pay (with pension deducted if tax exempted) is so far this year, then you should be able to work out what it will go up to by end if the financial year if you look at the increase from last month to this month and add Feb and March pay on

You should be able to log onto your government tax account then it tells you what your taxable income is to date (which is what your payback is based on). Then you can check in March whether you've gone over £50k but unlikely for you due to pension contributions

Tax year is 6th Apr-5th Apr, you can do your a tax return as soon as you get your P60 in a few months, you have till 31 Jan to pay it. It won't be much even if your pension contributions didn't take you under the limit.

What I dislike about the CB not being universal is that we see thread after thread of women who are abused financially so this would at least be something they are able to claim regardless of their husbands earnings.

It's a total shithole that people earning 50k are even entitled to it at all! Even worse that 2 people in the house can be earning up to 100k as a household and still get it.

It should be lowered to at least 30k before you can claim at all.

Which tax year will you first earn more than £52,000? If it's the current year (Apr 2022-Mar 2023) you will have to declare the child benefit in your tax return in December 2023/Jan 2024. You can then repay the amount that has to be repaid through slightly higher income tax in tax year 2024-2025. If the pay award isn't backdated to Apr 2022 you may well not earn over £50,000 in the current tax year anyway.

Sorry, that should have said "...earn more than £50,000?"

As others have said you can still claim when earning £50-60k, you just have to pay a proportionate amount back. At gross £52k and with a pension it’s still going to be very worth you claiming the child benefit as you will be able to keep a huge chunk of it, the recharge will be low. Also the current recharge for 31 January was the 2021/22 year not the current tax year. I’ve just paid my recharge for the last tax year

@MajorCarolDanvers
Yes they do major. They contact you to tell you a tax return needs to now be submitted. I know so, because Dh as contacted, and 3 of our friends aswell.

Fucking stupid system, and I speak as a beneficiary. It was better universal.

Yanbu, 50k if you’re on your own isn’t much these days! We haven’t had it for a few years now and don’t bother (to just have to give it back after tax return, too much faff).

This.

OP I earned £52k in the last tax year (21-22) and had to pay back £330 on the tax return I have just done - that’s for two children. As others have pointed out, if you pay into a pension that can take you under the £50k threshold. I actually earned £58k before pension deductions.

@pinotnow

1. Tax year is 6 April to 5 April
2. Its gross earnings for the year so very basic maths - 3 months at £49k/12 x3 (£12,250) and 9 months at £52k i12 x 9 (39k) = £51,250
3. Deduct pension contributions 10.2% x £51,250 = £5,227 from gross pay = £46k so well under the £50k limit. Note you are taxed on £46k not £51,250.
4. Your employer pays 23.68% = £12,136 in pension contributions. compared to the legal minimum of 3%.
5. you will have banked 1/57th c£900 as a DB pension this is revalorised from April 2024 and every year after that by I think CPI.
6. You may find you pay slightly more pension contributions because the pay award was delayed. Far to complex for me to explain on a Sunday night.

You may think it’s a shithole country but when you ask what % employer pension contributions other non-public sector workers get and what their DC pension scheme will pay out compared to your DB scheme you may be surprised.

This is a classic example of why I believe personal/family finance and basic maths should be taught in schools.

I think the whole cutting of child benefit is confusing as it only applies to one of the parents ie if both earnt 49 000 it could still be claimed. In addition the fact the threshold has remained at 50 000 has meant more people are not receiving it. I understand that its the govt way of reducing expenditure but I do not think it should be applied in this way - it is just another example of middle income earners being squeezed

YANBU I'm a lone parent and it really makes me angry. It should be based on household income.

@Thatsnotmybee exactly! That's my situation. My friends who both earn just under £100k are both entitled to the same tax free childcare benefits that I am entitled to, despite I earn just under £50k! System is max!

@daffodilday this country and how it is run is shit! I agree with OP!

I personally think it should be eradicated.

I was in a similar position to you, teacher, similar salary etc and did my tax return.
The first year I did it, I actually found out I had overpaid tax (maybe WFH during Covid) and I got a rebate.
This year I did it and owed money but it really wasn’t a huge amount, about a month’s CB payment.
I don’t feel I can complain with a decent salary and getting CB over 18 years.
I get your point about the single parent issue though. You probably have much less to pay back than you think.

OP you’re on £52k, got a decent pay rise this year, about to get more as you got a promotion, and have the opportunity to earn more with exam marking. You’re in a much better position than a lot of people, Why are you getting angry about child benefit being reduced? Why, on that amount of money, should you get benefit money?

And families with a SAHP.

You are well paid and have had a pay rise. In any case you might not even have to pay it back when pension contributikns are taken into consideration

We were overpaid 3k by tax credits in the year I went self employed, as I couldn’t estimate how much I would earn. Very nice lady called and worked out repayment over 12 months (but I’m sure could have been over 36 if we asked) all v amenable and understanding. But still v annoying!

Or you could have put the extra into a private pension and kept both the extra and child benefit.

You could call HMRC, get them to work it out ( pension payments, when you actually got the raise etc..) I’ve found them to be helpful. You can also offer a repayment plan if it’s necessary.
Alternatively find a self employed accountant and ask them to look at it, won’t take an efficient accountant more than half an hour to tell you your position and might be worth the cost of that.
Agree with you, it should go on household income.