Child benefit earning just above £50k

[Theforest]

I wonder if anyone can advise.

DH earns about £52k. I stopped child benefit about 18 months ago as he had a large bonus. No chance of bonuses now so probably worth claiming again.

Can I claim for last year 20-21 and on-going? If he earns £52k do we minus off pensions contributions which will be under £50k meaning he doesn't have to do the self assessment. He is PAYE so don't currently do this.

I will ring HMRC but wanted to get my head round it first.

You can only claim a small back dated amount. If you have into a pension this is taken off earnings so can bring the amount down. I would claim and report so you don't miss weeks of money going in and out.

You need your P60 amount.
This is the salary that is taken account for tax purposes. If this is under £50k there will be no higher tax child benefit charge to pay
If its above £50k and below £60k the charge will be proportioned.
Anything above £60, you lose all of the benefit in the charge
Its probably worth claiming child benefit regardless to ensure that dc automatically receive the NI number at the appropriate age too.

You can deduct pension payments from your gross salary. If that brings you under £50k you will have nothing to pay back.

You should claim the child benefit because those years not working get counted towards your eventual state pension. As far as I know, in the case of my DS and DIL it gets added to his income in some way for tax purposes. So basically my DIL claims it, and what is above the limit, gets paid back by my son in tax

Always claim and pay back it will affect your ni.

Claim it and pay back each year - I've always done that - for the reasons above and generally there has been too much tax deducted (due to bonus removing the non-taxable element) so often there's an overpayment in tax on our part and just means we get a smaller rebate in the end as they deduct the CB themselves when calculating the tax overpaid.

If you worry about paying it back then put into a separate account.

Ok looks like we should claim again then.

I think his pension contributions will take him under £50k so hopefully not needing self assessment. Is that our call not to do self assessment or do I have to provide P60, P11D figures to HMRC and they agree not to? How do we prove private pension contributions through the bank?

What's on his P11D? Does he have a company car?

While the pension contributions reduce a salary for the purposes of CB, benefits like a company car or other benefits increase it, so in extreme circumstances, someone without a pension but has a company car could lose some of their CB under £50k.

There's a calculator on the HMRC website that asks all the right questions to work out his salary for these purposes - look for high earner child benefit.

He could always do a tax return anyway if unsure once he has his P60 and P11d as it would be about 10 mins work each year.

@Kazplus2

You can deduct pension payments from your gross salary. If that brings you under £50k you will have nothing to pay back.

This would be the case yes, so I think we will get the full amount.

If he got a pay rise pushing above the threshold, do you just register for self assessment and report in January or at the time of the increase?

We have only both been PAYE so not sure what's involved.

@BarbaraofSeville

What's on his P11D? Does he have a company car?

While the pension contributions reduce a salary for the purposes of CB, benefits like a company car or other benefits increase it, so in extreme circumstances, someone without a pension but has a company car could lose some of their CB under £50k.

There's a calculator on the HMRC website that asks all the right questions to work out his salary for these purposes - look for high earner child benefit.

He could always do a tax return anyway if unsure once he has his P60 and P11d as it would be about 10 mins work each year.

Thanks.

No car but has private medical through work but still works out to be under £50k with the pensions contributions deducted. So that's good.

@idontlikealdi

Always claim and pay back it will affect your ni.

You can also claim and opt put of the payments, to maintain ni record. Iirc you can only backdate 3 months.

You should do the self assessment. It's very simple to do if your only income is PAYE. I just have to add up interests I earned (it's less than a pound last year), and enter the number on my P60.

Sorry to jump on this thread. But when I marry my dp (he earns over 60k) do I stop claiming child benefit for my two children?
They are not his...

Thanks

@bettertimesarecomingnow do you already live with your DP? If you do then he should already be declaring this as it’s just anyone in the household earning over £50k. It’s irrelevant whether you’re married or not and also irrelevant whether the children are his.

If you live with him now @bettertimesarecomingnow you should have stopped claiming as soon as you moved in together.

While it may seem unfair, it's whether there are any high earners in the house that's relevant, not marriage or parentage.

Same rules as applied to means tested benefits when a single parent and working partner move in together. Joint finances are assumed.

Cross posted with Chessie

No we don't live together yet, but we will be soon. House being built this summer.

Thanks for the info!

When you move in together, either you will need to stop claiming CB or he will need to declare it in his tax return for 2021/22.

Oh he can do that? Hmm interesting! Thanks

Just wanted to add if you are in the awkward threshold where you have to pay back a certain amount you can also claim benefits but not actually get the money to help towards your NI contributions. We did this as the faff of doing the SA and knowing who to pay back, endless phone calls between Child Benefit and HMRC sending us backwards and forwards.

Yes better, you don’t have to stop claiming, he will just need to do a tax return and anything you’re not entitled to is paid back that way. Up to you which way you manage it.

I really worry about this too but checked this out with our finance person earlier this year as I am way over £50K but pay crazy pension contributions which take me under the £50K (no other benefits at all). I was assured this is all fine as long as I stay under the £50K. My P60 shows the under £50K amount.

Claim it. Should you ever split up there's a huge benefit in being the one who claims the child benefit. Harsh but true.

So it's the P60 taxable income plus P11D minus any private pension contributions?

You would usually get a letter from HMRC saying you need to do a self assessment. If you don't get it then you don't need one.