Feeling stupid and sick - Child Benefit Charge

[blueshiningsea]

By way of background, spent 10 years in a low paid job in the public sector. 3 years ago I bagged a dream job with a salary just under 50k p/a. Salary has increased year on year. I was reading a magazine last week and it talked about Child Benefit Charge for those earning 50k plus - where you had to pay back the Child Benefit up a sliding scale up to 60k pa where you don't get any. My DH earns less than me, under 40k. Unfortunately my DH has been putting our Child Benefit into our 4 children's' bank accounts for saving for Uni and they are the type of accounts that you can't get money out of again. I rang HMRC immediately and on their advice I did a self assessment today for the 3 years where we have been mistakenly receiving full child benefit and we owe £6k!!!! I feel sick and very very stupid that I missed this (no excuse I know), I think it was because it came into force when I was earning a lot less and so didn't register as being applicable to me. Our savings are less than 6k as we have just had some work done on the house, and we've committed to some expenses next year (holiday and school trips) but very worried about money and (although not catastrophic) won't be able to buy much for the kids for Christmas now. Think HMRC do some sort of repayment scheme, but with interest? Would this be the best way to sort this? Just wondering does anyone have any wisdom or practical words of advice?

Thanks puffy, it’s been a really scary experience and was way out of my depth with the self assessment, PAYE codes etc. Whilst my salary would seem like a lot, my husband doesn’t earn much and we have 4 children and don’t have a huge amount of savings as I was seriously poorly a couple of years ago. Won’t be able to save for a while now due to repayments but have to take it on the chin and get on with it. It is a really awful system, was almost tempted to ask my boss for a pay cut to take me below the threshold but eligible for c.b.

Thanks AnotherEmma, I nearly fell off my chair when they told me that 1500 was coming out of my salary at end of December (due to a ‘K’ tax code whatever that is)as an advance payment of my 2021/22 c.b charge liability. I’d had no notice of this and wouldn’t have been able to meet my financial obligations. What a ridiculous system. In all other walks of life, you’d get written warning beforehand to have time to make adjustments if possible.

Glad you at least know where you are now! Unbelievable you wouldn't know about £1500 coming out until you saw it!

Remember to still 'claim' CB but don't actually claim the money, if you see what I mean...

Yes I see what you mean, will do xx

As this is such a knowledgeable group I’m hoping someone can help answer my question please?

I earn £55k pro rata at 3 days a week (£33k) & £48k 2 days a week (£19k). This started last month. Around £52k total. Before that I earnt £47k total or less (much less) since having kids. Husband earns less.

I have a salary sacrifice lease car for 3 years and it costs me £750 before tax per month & £320 after tax (it literally costs £320 pm but takes around £8k a year off my salary). Hope that makes sense.

I pay into both pensions (2 different organisations) around £400 pm total.

Do I owe any CB back going forwards into new job? 🤪 🤯 I would like to organise everything properly in light of new salary. TIA.

The HICB charge is a nightmare and causes a lot of issues

Regarding the tax code though - HMRC will have sent you a notice that it was changing - they write to employee and employer at the same time

I would also recommend signing up to the Government Gateway as you can see your account on there and track changes

A K code means you lose your personal allowance
The number after it you add a 0 on to and that is the additional amount that you will be taxed on - this is to cover benefits, money owed to HMRC, etc

This is where you can find out what tax codes mean www.gov.uk/tax-codes/what-your-tax-code-means

@blueshiningsea "Anyway, the upshot is that I’ve cancelled the child benefit as cannot face being stung again like this and likely that my salary will increase to the upper 50s going forward"

Please don't stop the CHB. You are chucking money away just as you are repaying it as well. When I was in your position I just paid some excess into another pension scheme and retained the CHB. Been great as cost very little and the private pension fund has grown amazingly well

@YokoOnosHat - I hope you don’t mind me asking you specifically but you said this in your post:

your pension contributions don’t count off of it if it’s an employer pension scheme

This has worried me! I earn just over 50 thousand as a teacher but really thought my pension contributions took me under. I’m not so sure now! The pension for teachers counts as an employers pension so I’m worried I’ll be owing money also!