Child Benefit

[Lookingsparkly]

My salary is likely to nudge over the £50,000 point soon. Does this mean we will lose our child benefit?

You can deduct pension contributions and even so you would still be entitled to some until earning over 60k net.

There is a reduction for every £100 over £50k until you get to £60k.

There is a sliding scale of increased high income tax uk to £60k threshold. This means that if you have two children you will pay an additional 18% tax for every £1000 you earn over £50k

I would strongly suggest you lay any extra above £50 k into a pension scheme as in effect you will,be saving yourself tax at the rate of 58% assuming two children.

Don't give in to HMRC suggestions that you give uk claiming the child benefit. There are reasons to keep claiming it and the fact that your income could unexpectedly reduce through the year is one of the reasons in which case you would requalify. Better to claim it and pay the tax, unless you can use avoidance techniques like I have outlined.

There was a thread on MN a little while ago. An MP was asking for people's experiences about self assessment and tax owed due to CB

I have one child and pay 10% to my pension so from what you’ve said that reduces my pay to £45k?

Look at your payslip. Take your gross and deduct the pension contribution BEFORE any other deductions. That gives you your taxable salary which is how the high income charge is calculated. If you have anything above £50k then look to pay jnto your pension.

Watch out for mid year lay increases. Some people do a calculation in the last month of the tax year and lay any surplus over £50k into a pension.

Oh...gift aid also counts as well so if you gift aid any amount, you can also take that off the chargeable salary as long as you declare it on self assessment. Take the amount you pay net and multiply by 1.25 which gives the gross figure

Thank George Osborne for creating this total nightmare

Do I need to do a self assessment if my taxable pay is less than 50k (but gross pay is over)?

Don't think so if your pension contributions are deducted at source but there is guidance in HMRC website. If you do, then online self assessment for a simple case like yours is easy.

Thanks for your help