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!

Given that just about everyone earning £50k will be paying a few thousand a year into a pension I find it very surprising how many people think you lose all CB the minute you go over £50k, when in reality most people on £55k will still be getting most or nearly all of it.

All these saying it's a piss take the rules are meant to benefit people on minimum wage not you, and if you can't survive how do you think they can.

YANBU - it is so wrong that a couple earning a total of just under £100, 000 if each earning £49k each can claim but a single parent or parents where one earns over and other may not work or earn very little can’t. It’s wrong on so many levels.

I don’t support anything that takes us into the realms of joint taxation
Women fought for years for individual taxation
Also don’t support any tax measures that support SAHPs

Exactly, there are two income families on less than the OP.

Exactly! It doesn’t make any sense that one family can get benefit when they earn close to £100K and the other not eligible at £52k

No advice, I'm afraid. Just sympathy - I think the child benefit system is very discriminatory towards one parent households. You'll have to pay it, but I'd encourage you to write to your MP about it.

I’ve had the same scenario this year but I think it’s earnings of £50k (to start the taper) this tax year so presumably your earnings to the end of may won’t exceed it anyway?

Why are people so nasty! This is fecking mumsnet, where mums (you know, those people who produce and raise children!) look for advice. They would give her 'free money' if she was living with another lower earner, even if their net income was well over the threshold, so why discriminate against one-income households?

You do realise it was a lib dem policy and brought in by them during the coalition?

As far as I’m aware pension contributions only count if they are not taken directly from wages, as they already have tax relief applied. The system is deeply flawed. We have a total household income of 70k and had to pay £844 back. I’ve since cancelled receiving child benefit as the extra £140 a month isn’t worth paying a lump sum in January.

Can you pay money on your pension. So that it doesn’t increase by much. As the money that is taken into account is without this
also last year I earnt 52k and I had to return 110. It’s more the hassle of having to do self assessment that is a pain

Following the introduction of independent taxation in 1990 it was no longer possible to include joint income assessments for the likes of child benefit and therefore the situation of apparent inequity highlighted by the OP was established.

www.europeantax.blog/post/102fv8r/what-does-independent-taxation-mean

There are obviously pros and cons to this change of tax status but the removal of universal child benefit in 2013 and the introduction of a salary ceiling in conjunction with independent taxation has caused situations like this.

Don't forget that the average full time salary in the UK is around £38,500 and CB is fully available up to £50k so that ought to cover higher than average incomes.

However, the CB income threshold has been frozen since it was introduced ten years ago (by a Labour government) when the average UK salary was less than £30,000. Consequently, CB is no longer as widely available to the population.

Whether the threshold is right is clearly debatable, especially now when personal tax thresholds are frozen for five years during a cost of living crisis. It is very large stealth tax for some people and a large increase in some people's personal marginal tax rate which is hard to stomach.

It's obviously also a disincentive to developing a career and earning more money if a disproportionate level of a salary increase is absorbed by higher taxation/reduced benefits.

However, the CB income threshold has been frozen since it was introduced ten years ago (by a Labour government)

In 2013?

Try and speak to HMRC. They are usually very helpful. As soon as I reached the 52k in salary I got sent a self assessment letter for the relevant tax year.
It is unfair they way that this is calculated and I empathise. Hopefully your pension will help with keeping you below the threshold. Mine actually did but I do pay a fair bit in.

Stupid system with many pitfalls.

I claimed CB as a single parent earning less than the threshold, then my partner moved in. He earned just over the threshold, taking him into the self assessment system - not their DF who paid very little CM, just a man that wasn't responsible for my teens.

The self assessment was a nightmare to sort, including getting out of it, when my CB stopped. I didn't get any money and partner was still receiving tax demands.

Hi there,

Can you link to any evidence on salary sacrificed pension payments not counting towards reducing Adjusted Net Income for child benefit purposes?

Thanks

I think it’s incredibly unfair that it’s not based on household income. But have always thought there’s a second problem too. Imagine the women in abusive relationships where their partner earns a lot but the woman has no access to it - the whole point of giving it to all mothers was that they had some money in their pocket. I don’t actually think it should be means tested at all for this reason.

anyway, as for your situation, it is rubbish and I am hugely sympathetic. You haven’t missed a deadline though - it’ll be the next tax year where you’ll have to pay some of it back.
I’ve had to do this because I had a mat leave so qualified, then earned too much in a full year of working when I went back so had to pay some back, but there is a time lag, so you’ll be ok

best of luck x

So, the amount I quoted is before any deductions, which is gross income isnt it? So is it as simple as adding all my pension contributions up and if they bring my take home pay below £50k (they will) then I don't have to do anything?
One of the first responses gave links to the govt website - explaining that it's based on gross taxable income. That is very different to take home pay
"Your adjusted net income is your total taxable income before any allowances" the govt website also includes a tax calculator.

And yes, the tax year runs from April to March - So if your increase was in October, that's 6 months of 49k and 6 months at £52k pro rata - so £50.5k across the year, gross before your pension contribution. If your employee contribution is 10%, that's £5,050, so will put you well below the threshold, and probably will next year, depending on the 2023 pay award.

As a pp says, you'll get full year figures on your P60 - likely to be April or May. You can also look at the Year to date figures on you January payslip and add on two months (for Feb and March) to see what the full year will be.

Just pay any income that takes you over £50,000 into your pension (if you can increase the amount that is paid into your work's pension to cover the amount as that means you'll pay less NI - assuming your pension is salary sacrifice) before the end of the tax year (5th April).

You'll then keep your child benefit and the contributions into your pension will receive tax relief. Win win.

Also, people saying that CB should be based on household income...

1. households with 2 workers approaching £100k household income are just as in need of child benefit as we are paying through the nose for full time childcare. We also pay an awful lot through taxation so not exactly sponging.

2. This assumes households share finances which is not necessarily true.

Child benefit should be universal as it's fundamentally unaffordable to raise kids before primary school age (NB assumes the government would like this country to continue existing)

Drives me absolutely nuts that it’s not based on household income and that households with an income of £99k can still claim it. Also drives me mad that the ‘tax’ on the between £50k and £60k can’t be sorted out without having to do a tax return. We’ve just realised we need to pay back 100 percent of this last years due to an unforeseen bonus. It acts like an extra tax on that 50k to 60k bracket which wouldn’t grate do much if households earning 99k across two earners weren’t still getting to claim full child benefit. It’s maddening!!

Why are people so stupid? OP is an entitled whiner regardless of the past performance of her uterus.

I also had to pay through the nose for nursery as a single parent 🙄

So OP is whining that they got a payrise which means that she, on a relatively high salary, gets a little less of the money we pay in tax. And has the sense of entitlement to blame this on it being a 'shithole country'. I guess something, or someone, is full of shit, and it's not the UK

the op pays tax too....