Surprise 5k bonus 4th April child tax benefit issues

[PrinnyPree]

I'd just like to start that this is a massive first world problem and I am very very lucky to be getting a bonus and extremely grateful for it. I also hope this is the right place to post and hopefully someone can help?

Basically today HR informed everyone we were getting our bonuses early. I wasn't expecting this bonus till July and this will bump my annual salary into the 40% bracket and also I will have to fill in a self assesment for child tax benefit.

I contacted HR to see if it could be deferred until 6th April and they said no, so I asked if it could be put into my pension since I'll lose alot of it to tax and having to repay child benefit and they said payroll will only do it for my next months pay end of April(which is too late)

Is there anything I can do with the bonus to get it into my pension or are my employers the only ones that can facilitate that? They seem to be refusing to put it straight in there which I find a bit unfair since they usually could do that.

I really wish they could have given us more notice and I would have put more of my pay this month into my pension.

Once again I know this is a massive first world problem but we only have one income supporting the family at the moment and just doing my best to make the most of our earnings. X

Thankyou x

You could set up a personal pension, but given you say this will tip you into 40% tax your total earnings will be under 55k. How much is already going into a pension? I'd guess you'd be keeping the majority of your child benifit anyway

@JurassicPerks so far £53.5k but I've already put £4.2k in pension this tax year so just over £49k after pensions have come out.

I will be keeping most of the child tax benefit even with this bonus, however with my calculations I'll have to return £420 of the £1099 child tax benefit and most of the bonus will be taxed at 40%.

Basically after I get this surprise bonus my after pension salary will be about £54k if that makes sense.

Call the pension provider straight away and ask if you can pay it in via a bank transfer from your bank account.

I can do an extra payment this way with my work pension. Then you can transfer the funds tomorrow.

You do need to ask the pension company if it will be credited to your pension account this tax year.

@Findingneeemo thankyou for the reply however won't I be taxed before it comes into my account? Will that mean I have to claim the tax back? Sorry if these are daft questions. Really appreciate the advice. :)

Yes you will be taxed. Do you fill in a tax return?

@Findingneeemo I don't usually although I had to fill in one last year as I earned just over £50k after pension contributions and had to fill one out for child tax benefit to pay some back. I tried to put extra in my pension this year to avoid the faf of having to do it again this year! 😅

I'll ring my pension provider tomorrow and see if I can put in a chunk before the end of the tax year. Looks like filling another self assessment tax return in this year is unavoidable now unless I can twist payrolls arm to pay it directly into my pension. Thankyou for your advice!

You can send a personal payment but if you want £5k to go in you send 80% of that, then you get the other tax back through your tax return

Annoying not to be able to avoid the ni on it (but maybe there is none as over the limit)

You are likely to have to full one in this year if you did one last year. Also don’t forget to claim any charity contributions/working from home etc.