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Original poster

Child Benefit & Bonuses Query

18 replies

BoyMeetsWorld · 31/03/2018 18:18

Hi all

Sorry for being dense but bit confused and DH and I are interpreting the Gov.uk website differently.

Up until April this year, DH and I were below the 50k barrier for child benefit, even inclusive of bonuses so no issue.

From April this year, I will still be well under. DH will be just under for net salary...49k. But each quarter, he has potential to get a bonus that can be anything from 0 to 1500k.

How will this impact child benefit?

As I understand it, you pay back at the end of the year depending on the amount you were over. But if bonuses count towards the 50k limit & bonuses aren't in any sense guaranteed how would we figure out how much to 'hold back ' to pay back the child benefit at the end of the year?

Surely it could be anything from nothing (if he didn't get one or it doesn't count towards it) to losing the full amount if he got all the bonuses every quarter. But that seems impossible to predict and I really don't want to be landed with a surprise sum at the end of the year we can't afford to pay back so would want to put it away each month. And would the pay back cancel out the whole bonuses?

Sorry, panicking a bit as never been in this position before and the advice doesn't seem clear...

OP posts:

LIZS · 31/03/2018 18:22

It probably won't. Assuming he pays into a pension within his salary it is unlikely that the net pay will be in excess of 50k.

Temporaryanonymity · 31/03/2018 18:25

Yes, you need to be in the same boat. It's the same for me this year, and I'm a single parent so it is the only household income. I woke up in a sweat about this the other day too, and was much relieved when I realised about the pension aspect.

Toomanycats99 · 31/03/2018 18:27

If it is still over even after pension then you need to do a tax return. This needs to be done by 31 jan for previous tax year. However if you complete it by 31st December you can choose to have anything owning built into the following years tax code. So no lump sums due.

Original poster

BoyMeetsWorld · 31/03/2018 18:49

Thanks all see that's where I'm confused - common sense told me he should be ok because of pension as he pays quite a lot into his...

But I did the calculator thingy on Gov.uk (which has really confusing wording about pension- it doesn't ask what % salary you pay into pension, it just says 'Pension Amount' which I assumed was for the full year). I then thought this would be taken off but it didn't seem to be.

And it came out looking like we'd have to pay back- that was with only the 1 quarter bonus entered in, never mind any others...

OP posts:

Original poster

BoyMeetsWorld · 31/03/2018 18:52

Ah Toomanycats so if for 2018-2019 we fill it in by Dec 31 this year, we can get it taken out of monthly salary in 2019? That'd be so much better.

Do you know what the opening date for being able to do that is, if the closing date is Dec 31st? Thanks

OP posts:

reallybadidea · 31/03/2018 18:55

I assume by net income you mean net of pension contributions, gift aid etc not net of tax/national insurance?

You can always put any bonus in his pension as an additional voluntary contribution to stay under 50k (up to maximum pension contributions limit). If not then you lose 10% of your child benefit for each £10k of earnings above £50k. So unless you have lots of children you wouldn't have to repay more than the bonus was worth anyway.

Original poster

BoyMeetsWorld · 31/03/2018 18:55

Also looking at what people have posted here, is it 50k net as the cut off?? I thought it was 50k gross?

OP posts:

Teenytinyvoice · 31/03/2018 18:57

You can fill in the on line assessment as soon as you have your p60

Stinkbomb · 31/03/2018 19:00

It's calculated on gross income (including bonuses) but after pensions have been deducted. If you opt to sort it by self assessment you can have the amount to repay included in your DH tax code for the next tax year so don't have to pay it all in one.
If he's a higher rare tax payer, he might also be able to reclaim the additional tax rebate on his pension contrive which may off-set the repayment due on the child benefit.

Original poster

BoyMeetsWorld · 31/03/2018 19:05

Ah! We'd put in salary without deducting pension...thank you! Off to try the calculator again and see if that makes any difference

OP posts:

Original poster

BoyMeetsWorld · 31/03/2018 19:29

So having done the calculator again with the proper pension deduction it looks like we'd need to pay back about £800 based on the likely bonuses.

To be able to get that deducted from the following year salary rather than lump sum, it sounds like we would need to fill out the online form by 31st Dec.

Please can someone advise - the final bonus related to 2018 gets paid in Jan 2019. Therefore, would we be able to fill out the forms before Dec 31st using a speculative guess of the expected bonus still to come? Or would they expect exact figures which would be impossible to know and mean we'd miss the Dec 31st deadline and have to do lump sum in Jan instead?

Why's it such a stressful complicated system!! I don't mind not getting as much if we earn too much at all...just wish it was all clearer and no risk of scary last minute lump sums!

OP posts:

Toomanycats99 · 31/03/2018 19:45

@BoyMeetsWorld

The tax return you do by jan 2019 is for the tax year ending now. So anything paid January 2019 will not be due until your tax return due 31 jan 2020.

Stinkbomb · 31/03/2018 19:46

You can't do your tax return before the end of the tax year. You can file as soon as you have your P60 & P11d so don't have to wait until the 31Jan deadline.
Eg the 2027/18 tax year ends 5 April 18 - you then have until 31 Jan 19 to file your self assessment online.

Original poster

BoyMeetsWorld · 31/03/2018 19:57

Ah ok so for 2018-19 which is the first year this involves....we get DHs P60 in April 2019 and have from then until Dec 2019 to file the online claim in order to get it adjusted back off his tax code rather than pay lump sum?

Can we register before then or might we as well wait until we're ready to file the self assessment forms?

Thank you so much for explaining

OP posts:

Toomanycats99 · 31/03/2018 20:04

It's best to register early - I think I remember they need to send you something by post......

LIZS · 31/03/2018 20:07

Unless you have several children an £800 overpayment sounds rather high for a borderline 50k income. Agree you only need to worry about this in about 18 months' time. You can opt to fill out a paper form instead for which the deadline is end of October following the relevant tax year.

Original poster

BoyMeetsWorld · 31/03/2018 20:13

@LIZS Its borderline as base salary but then circa 5k of bonuses and a fair bit of benefits in kind like company car / medical insurance etc which they ask about too.

Speaking of which - does anyone know what you do about childcare vouchers as they're tax free so wasn't sure where I should include them?

OP posts:

Stinkbomb · 31/03/2018 23:28

Childcare vouchers are normally salary sacrifice so reduce his gross salary so no need to declare them. However, if his earnings go over the threshold, he will only be able to get £124/month in vouchers, but I guess if earnings are already c£49k you'll already have that sorted.

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