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.

The onus is generally on the employee to know that they are part of a family that claims child benefit and at what wage level they would need to pay back some/all of the child benefit

If it is the first year you are having to pay it back (our is this year) you can telephone and ask them to split it into payments… they would only split ours into three… but that is much better than one lump payment. Just be aware when you do want to stop it both of you need to go on the website and stop it. My husband went on and stopped it, we thought that was it, but then continued to receive it… as I also had to complete a form…

A few years ago I contacted HMRC as we'd forgotten to inform them my husband's salary had increased and we were no longer entitled to CB. We had a few years worth to pay back for two DC.

I was asked loads of questions, almost like an interview, but the guy was very understanding. We were allowed to pay it back monthly as couldn't afford it in one lump sum. It's worth speaking to them.

The tax year hasn't finished yet so there's time to make extra contributions but I'm surprised that there seems to be an assumption that he automatically has enough spare money to do that

They seem to realise automatically (I guess they match up the two accounts based on your details) and send a letter asking you to register for self assessment. Then I'm not sure what happens but I'm assuming they will work out what amount you owe and adjust your tax code to claim it back like they do for everything else.
Totally agree on the pension thing, or if it's a smaller amount then charity donations might be reasonable for you. A lot of employers do pre tax charity giving.

It's always good to point it out as an option but it's a huge chunk of change if the OPs partner has earned 60k+ after their salary sacrifice pension contributions, usually for that amount you're more likely to just pay the child benefit back really lol.

This happened to us as he had a good year a few years ago (I only earn 12k but they seem to do it per earner not per household income otherwise we would have been well under the threshold) Anyway when he put his yearly accounts in they took the amount owed off his rebate.

So he's not self employed, he's a public sector employee. He's gone over the threshold this tax year due to overtime and bonuses. He's not likely to have the same opportunities next year hence why I'm reluctant to stop the CB payment completely if that makes sense.

By next year I mean this year - 2024 😂

If it's a one off then I agree, file his tax return before December 2024, tick the box to have the payment clawed back via his tax code and just continue claiming as normal, keeping an eye on future years.

@hellojelly
So does that mean they won't ask for a lump sum off us, if he ticks the option to have it taken back via tax code? Is that a gradual thing rather than a one off payment?

Yes it just deducts more tax each month over following year.

Yes exactly, it will just reduce his tax free allowance next year so he'll pay more tax each month until the amount is recovered in full. But you must tick the box and must file by December.

I couldn’t pay mine back in instalments as I’d already done it the year before. After 3 reminders it was passed to an agency for collection, I called them and they asked how much I could afford each month! No adverse effect on my credit score and not recorded as a default on my report- seems silly that I couldn’t do that in the first place.

Take home pay is the missing detail here , on £60k I very much doubt he is taking home more than the £50k threshold

So now I'm more confused. So it's the net figure this is worked out on, not the gross?? In which case it should be fine!

He checked his pay slip yesterday and there's a year to date figure which was not far off 60k. However due to missing overtime that he wasn't paid for on time, plus a bonus he's owed, end of Feb he is taking home close to 7k. (This is compared to to a usual take home of around 3-4k). Could February then tip us over?

if his usual take home is 3-4k was he not over £50k salary before in 22/23?

Its salary minus pension, not take home pay.

https://www.entitledto.co.uk/help/child-benefit-charge

This might be helpful OP :)

I earnt over £60k last year I only have a basic auto enrolment pension so i opened another pension and paid £10k into it. The amount you deduct from earnings is grossed up by 25% of the net contribution so paying in £10k I could deduct £12.5k from earnings figure. I registered for self assessment and actually ended up getting about another £2.5k back as well as higher rate tax relief on the pension contribution so def worth doing

No, he was in a different job role 22-23. Jan 2023 he moved to a higher paying role.

Thank you. That still puts us over the threshold then.

This is complete rubbish and very misleading it is based on gross pay but you can deduct pension contributions (unless you are in an occupational scheme or salary sacrifice where they are already deducted from gross pay)

Use this. It's the UK Govt's child benefit calculator and helps you work out if you will have to repay.

I discovered that gift aid donations also reduce your liability (if that's the right word)

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

Theses are the allowable deductions: