Child Benefit Opt Out

[BlueThursday]

Hi

I'm expecting DC1 in January and from reading online it looks like we'll opt out from child benefit. Does this need to be done as soon as the baby is here or is it done at certain times of year?

Thank you

? do you mean because one of you is a high earner ?
Easier to claim as normal and then sort it through the tax return (then you have the money for the year)

I would still claim for the child benefit but then opt out of the payment. Will one of you be earning over 60K? You would claim soon after the birth

You would ideally claim, to protect your NIC's contributions if you become a SAHM.
But when you apply, there should be a box to not collect the money, or you can have the money, and return it through the tax system.

If you don't apply, you can't opt out!

Only opt out if you are certain someone will earn over 60K of taxable income (so remove pension, childcare vouchers etc) this, and every year.

Maybe I've read it wrong. I read it that if you take the money you pay a charge on it so better to opt out?

If it can be done at any time I think we'll just get the accountant to do it.

I won't be a SAHM I'll go back to employment (PAYE) but DH submits returns

If your dh submits returns and is the higher rate taxpayer then i don't think it's a big deal to pay back. If it's you, as paye, it's a right far. Ime anyway

You don'y pay a charge on it, you just have to pay it back - either as part of the tax return or through coding
either way, if you have an accountant they will tell you as we accountants are : claim it first as earnings can be adjusted later

Thanks all, I'll leave it to them then

Never opt out. Take it and put it in a savings account. Then it is there to pay the charge at the end of the year (which simply equates to the money they gave you). The reason is simple: your circumstances could dramatically change during the year meaning you never reach the £60k, but child benefit claims can only be backdated by a short amount. So, if something awful happened part way through the year you might become entitled to the CB for the entire year (which you might well need), but only able to claim part of the year due to the backdating rule. I never would have worried about bad things happening a few years back, but now I have seen redundancy, cancer, and other life changing issues happen to real people I know, and the financial consequences can be awful.

You might also get a minuscule amount of interest on the amount before you pay the charge.

Thank you Tiger thats a good thought

We claim but don't receive the payment. Our circumstances are highly unlikely to change unexpectedly within a year (due to contractual arrangements) and if they did it would be covered by various insurances / savings. Not receiving the money simplifies tax return and is one less thing to forget.

Sorry I dont understand, what is the benefit of claiming?

If one of you is a SAHP, you need to claim CB to get the NI credits don't you? Very worthwhile towards your pension assuming state pensions will still be available in future.

It also means your child will get their NI number when they are 16

Tigercake - that advice isn't correct. If you opt not to receive payments and your circumstances change, you can revoke the election and get the payments back up to two years. The normal child benefit backdating rules do not apply.

www.hmrc.gov.uk/manuals/cbtmanual/cbtm03130.htm

Cleo

Blue you won't automatically get it, so it's not a matter of opting out. You have to claim it in order to get it in the first place. Then you can either opt not to get the cash paid or you can receive the cash and repay in your Dh's tax return.

If you are or your dh/dp earn over 50k then you can either opt our of receiving payments altogether or wait until you complete a tax return for the relevant year (and have the benefit of the cash flow) to "repay" it. Between £50 and 60k earnings you don't repay the full amount anyway so it is worth taking the payments and completing a tax return. You can register of CB but opt out of receiving payments so that you still get the NI credits.

It also means your child will get their NI number when they are 16
Link please - bearing in mind that NI numbers are allocated at Birth

Still a bit confused if I'm honest! I think once DH is back in the country I'll have him speak to the accountant!

Fill in the form when the baby is born. The form is pretty clear, if one/both of you is high earner you either; 1. opt out of receiving the money, 2. Receive the money but pay it back when you do your self-assessment.
As your dh does a tax return anyway it doesn't really make any difference.
You should fill in the form either way because it protects your ni contributions whilst you are out of work when the children are little. If you are going back to work then, again, it won't make much difference.

Thank you very much

Will I get a National Insurance number automatically?

The only people who are automatically registered are those under 16 years old, who live in the UK and for whom Child Benefit is in payment. They are automatically registered and a National Insurance number card sent to them just before their 16th birthday.

If these young people do not receive a card they will have to apply for a National Insurance number in the same way as everyone else. See earlier question â??When do I apply for a National Insurance numberâ??. This means they must be working or claiming benefit and satisfy the conditions shown above.

So if neither of us is a sahp then we're as well off not to claim?

From gov.uk

You should automatically get a National Insurance number just before your 16th birthday if you live in the UK.

You won't get any particular benefit from claiming except maybe £2 (random guess) in interest if you wanged it in savings and then repaid it. If you both dropped below the threshold it could be handy to already be in the system.