Teachers- Child Benefit tax charge

[Icantaffordahugetaxbill]

I am beyond confused and would really appreciate some help. I have phoned child benefit who gave me conflicting information to when my friend called.

My salary from Sept is just over 50k. Previous to this I was on maternity so my taxable income for the year is around 30k.

When I phoned, the lady said I would have to pay the higher income tax charge.

My friend was told when she called she could deduct her pension contributions, which would leave her well under 50k. I was told it went on my “headline salary”. I asked if that meant “gross” and the lady told me it did.

I’ve no idea what “adjusted net income” means and everything I read is conflicting- some sites saying to deduct pension contributions, some not, some saying you can deduct union subscriptions, some not. The only consistent advice is to deduct gift aid donations. But deduct them from what, my 50k salary or my lower taxable income?!

I feel very dim trying to work this out!

If you are a teacher earning over 50k as in this is your gross salary, do you pay the tax charge?

Essentially there are two parts when calculating your child benefit tax. The first is income, the second is deductions.

Pension contributions can be dealt with under either section (and for some people both).

Teacher pensions take out your contribution before tax. As such your pension contributions are taken off from your taxable income. As such you will add your salary after the pension contributions have been deducted. Check your payslip or P60 for taxable income, use this figure.

You will not then list the pension payments in the deduction section (assuming you are not making additional payments into another pension).

My pension contributions are dealt with under deductions, as my pension contributions are calculated after tax.

Just jumping in here to ask if anyone knows of a dummies guide to tax returns? I have paid into a private pension so I will be under the 50k. Need to do a self assessment tax return but am feeling daunted. Wondering if there’s a YouTube guide or similar?

@Icantaffordahugetaxbill

I am back to square one of confusion

Look at the example in my earlier post. Gross salary (say £52000) minus annual pension contributions (say £4000) minus any other deductions that are made from gross salary (eg give as you earn, childcare vouchers) = taxable salary (so £48k in the above example). This is your taxable P60 salary and the one your entitlement to CB is based on.

@titchy

I really hope it is as simple and straightforward as that, despite the person on the phone telling me it definitely wasn’t on my “taxable income”.

Your gross taxable income is your salary. Your net taxable income is after specific deductions.

If your income before tax is say £51k but your pension is deducted at source so say your net pay is 46k, do you still need to complete a tax return (if you claim child benefit) as your taxable pay is under 50k?

Sorry not net pay but taxable pay under 50k.

I never used to fill in tax return when I was over on gross but under with pension and never had any issues. I think you only need to fill in a SA form if you need to pay some CB back.

You do need to be careful each tax year though to make sure you are still under the threshold. If you get childcare vouchers mine were always done by salary sacrifice so that just lowered gross salary. If you just have a job and no other income and pay tax via PAYE the HMRC has all the info anyway from your employer.

The HMRC does guides on how to fill in tax returns:

www.gov.uk/self-assessment-tax-returns/get-help

If you are employed only there is very little of it you need to fill in.

@Cattitudes

If your income before tax is say £51k but your pension is deducted at source so say your net pay is 46k, do you still need to complete a tax return (if you claim child benefit) as your taxable pay is under 50k?

No. Though hmrc might write and ask you to do a self assessment. If you're paye with no second income, share income, second home etc and your P60s it's easy enough though.