How do we pay this money back?

[childbenefitpayback]

Hi

Sorry I'm posting for traffic as I haven't a clue what to do with this and Google has confused me a bit.

Partner is for the first time this tax year likely to earn close to 60k, if not just over, which takes us over the threshold for child benefit. I earn 51k but pro rata'd to part time so it's more like 41k, meaning it's not me who's over the threshold but my partner. The child benefit however is received in my name for both children (eldest isn't my partner's child, youngest is).

From what I've read briefly online the person who earns over the threshold is the one who needs to submit the tax return. However he's not the one who receives the child benefit and one of the children isn't his. Does this matter? Also, what are the steps to declaring it and paying it back, please?

Thanks for any advice.

You need to do a tax return via HMRC, it’s really easy once you are on the website, yes it’s your DP who has to do the tax return not the person who receives the benefit

Btw you pay it in a lump sum 😬

He just completes a self assessment tax form on the HMRC website. Answer all the questions and it was calculate the amount he pays back. But if it's for this year it won't be payable until end of Jan 2025.

Thank you thats really helpful. Yes it's for this tax year, ie April 2023-24. We'd definitely have until Jan 2025 to repay it? Is that right?

I know 😭

The highest earner does the self assessment tax return regardless of who claims the money. Depending on when the tax return is completed it can be paid back through their tax code. If its submitted later than that deadline then it would be in a lump sum.

Don't forget any pension paid reduces his earnings, so depending on how much he's psying in will reduce what you need to pay back. The form is clear on what to use 8n each field.

If it is only for 2023/24 tax year he has to register for self assessment to calculate any repayment next year. If he completes it online by December 2024 it can be repaid via tax code adjustments otherwise a lump sum. If 2022/23 he needs to do so by next Wednesday. If you are sure it will all be repayable cancel future payments.

Just get him to put a few k extra into a pension and that will keep him under the threshold

You can pay your Self Assessment bill through your PAYE tax code as long as all these apply:

• you owe less than £3,000 on your tax bill (you cannot make a part payment to meet this threshold)
• you already pay tax through PAYE, for example you’re an employee or you get a company pension
• you submitted your paper tax return by 31 October or your online tax return online by 30 December

I'd look into him making higher pension contributions so you can keep the money.

You can stop receiving benefit now which will be 2 months you don't need to repay

www.gov.uk/child-benefit-tax-charge/stop-child-benefit

But as it's based on net income after salary sacrifice you should consider if there's anything you can do to reduce this and retain some/all the benefit

No, it doesn't matter that the claim is yours/paid to you.
It also doesn't matter that one of the children isn't his.

Thank you. It's definitely for the 2023-24 tax year, so it looks like we have a longer deadline to pay it back then?

I don't want to cancel payments just yet as we aren't guaranteed the same income next tax year, it may be less depending on various factors (without going into his job).

This is important.

Get him to stick a couple grand in his pension pronto

It's important but a bit misleading.

His P60 will already have taken into account any salary sacrifice pension payments he's made to the employer's scheme, so you can't deduct them again. It's only if the partner has made any further private pension payments that he can reduce his P60 figure. It catches people out thinking they can reduce their P60 earnings with their normal pension payments.

If he does that now, does that exempt us from paying it back? I'm so confused by the whole thing 🤦🏼‍♀️

In order to keep your entire child benefit he'd need to pay in enough to reduce his adjusted income to under 50k, so more than "a couple of grand."

How many sources of income does he have? If it's just one, from his "day job" then look at his January pay slip and see how much "year to date taxable income" states (most payslips show this). Also look at the January taxable income, just for the one month of January.

Take the YTD taxable income and add two lot of the Jan taxable income on to it (assuming his Feb and March payslip will match the Jan). This will give you a decent approximation of his 23/24 tax year taxable income after pension deductions and any tax efficient benefits.

If this number is, let's say, £55k, can you afford to put £5k gross into his pension over the next 2 months? Thus reducing his taxable income to £50k. You'd get to keep hold of the child benefit and avoid the higher rate tax on the income above the threshold.

Might be worth considering.

It's what I do, and also have my bonus paid straight into my pension too.

@hellojelly yes, correct, but most people think 'I've earned £60k' not 'I earned £42k after pension is deducted. OP's DH may not need to pay it all back if this is the case.

The P60 won't be available yet to view, and OP sounds like DH has just reached 60k this year, not last (when the most recent P60 is available to view).

Get him to log into his hmrc account. That will tell you where he is at as to his last pay date, and is updated with each paye pay day.

I agree I just felt the first post was slightly misleading because often people assume they can deduct their SS pension payments from their P60 and this isn't the case. Seen it many times on here where they've earned £50k plus according to their P60 and assume they can deduct the £200 or whatever they pay on their payslip into their employers pension scheme. Just thought clarifying the situation would be better.

P60 not yet available (and obviously can't file a tax return for this year yet anyway) but YTD taxable gross on payslips will give a good indication of what it will end up being close to.

Thanks to all for your advice so far, it's been really helpful.

Sorry if this is a stupid question - does HMRC automatically somehow know when you've earned too much to qualify for child benefit? I'm guessing in my partners case it's different because the CB claim isn't in his name, therefore how would they automatically know? Whereas if it were my salary that had gone above threshold they'd maybe link it all up automatically because I have an active CB claim in my name? Sorry if this isn't making any sense just trying to get my head around how it works, and whether the onus is on the CB claimant to initiate the process or if you are notified somehow by HMRC when you owe money back.

They will eventually find out (and apply late fees and penalties) but on the whole, no, they won't tie up the systems in the same tax year to realise.
The onus is on the taxpayer to notify HMRC by registering for self assessment.