Child benefit, earning over £50K & self assessment

[Hotyogahotchoc]

Can anyone explain how this works and what you need to do if you earn over £50K please?

Register for self assessment and fill it out, where it asks about child benefits click yes and also calculate how much - you can add up the payments to bank account - then pay back anything owed.

How it works is whoever earns most over 50k in house has to pay back 1% of every £100 (I think!) received as child benefits. So if two parents earn 49k each there’s no charge, if one is sahp and one earns 50k you pay a charge.

I’d recommend you see a financial adviser. It’s only if your taxable income is over £50k so you need to consider pension contributions etc to see if there is any to be paid back.

@Namechangeno25788

I’d recommend you see a financial adviser. It’s only if your taxable income is over £50k so you need to consider pension contributions etc to see if there is any to be paid back.

I don't want to pay a financial advisor about a few hundred pounds that I may have to pay back anyway. I will probably be worse off than if I simply don't claim it.

Make sure you are using the figure on you P60 not your headline salary. Any pension contributions will be discounted which may take you back under £50k, or reduce your liability. I'm in this situation, my headline is a shade over £50k but my pension contributions mean I don't have to pay anything back.

@Hotyogahotchoc - You could pay a financial adviser a few hundred pounds to get back all of yoru child benefit and boost your pension? It is an avenue worth exploring

You don't need a financial advisor for what is actually a fairly straightforward on line form

1 - register for self assessment

2 - answer the questions / fill in basic personal details

3 - using info from your p60 input your salary

4 - add any additional "allowances" you are allowed to deduct eg if you make additional pension contributions (ie not one's deducted by your employer as part of your salary), or charity donations or If you do some business mileage and say you get paid 15p per mile for fuel from your employer you can claim the difference between 15p and the 55p that the government allows

5 - add info about private medical insurance for example you might get from your employer - you should have this stated on your p11d

Dh has done it for years now. Because of charitable contributions it's mostly worked out that the government owes us.

@bonetiredwithtwins

You don't need a financial advisor for what is actually a fairly straightforward on line form

1 - register for self assessment

2 - answer the questions / fill in basic personal details

3 - using info from your p60 input your salary

4 - add any additional "allowances" you are allowed to deduct eg if you make additional pension contributions (ie not one's deducted by your employer as part of your salary), or charity donations or If you do some business mileage and say you get paid 15p per mile for fuel from your employer you can claim the difference between 15p and the 55p that the government allows

5 - add info about private medical insurance for example you might get from your employer - you should have this stated on your p11d

I was referencing the option of pension payments, not an adviser to fill in the form

I used tax scouts to sort all mine for me as I was two years behind in submitting they now do it every year for me for £100 and generally save me money,

@bonetiredwithtwins
Sorry to pick your brain but when you say

“ business mileage and say you get paid 15p per mile for fuel from your employer you can claim the difference between 15p and the 55p that the government allows”

Does that mean claiming tax relief or claiming the actual cost of fuel??
DH gets 21p a mile but the car they gave him does such low MPG he spends much more than that per mile! Didn’t know we can use self assessment to claim back!

[quote Mummywantsaweewee]@bonetiredwithtwins
Sorry to pick your brain but when you say

“ business mileage and say you get paid 15p per mile for fuel from your employer you can claim the difference between 15p and the 55p that the government allows”

Does that mean claiming tax relief or claiming the actual cost of fuel??
DH gets 21p a mile but the car they gave him does such low MPG he spends much more than that per mile! Didn’t know we can use self assessment to claim back![/quote]
You claim the tax relief on the difference.

Just submitted ours for the first time based on our first year of receiving Child Benefit and I'm ... DH's P60 headline was £54k plus £3k of taxable benefits (Private Medical).

We'd received £650ish in CB and have been told that the high income CB charge is £450 - I'm guessing this is repayment of 70% as PMI puts him on 57k.

However, on top of this £450 (which we'd pretty much expected) there's a £1164 tax charge which seems to be for the £3k of private medical which seems obscenely high - so we're now facing a bill of £1600 to be paid by the end of the month. If any knowledgeable people are still on this thread please let me know, does this sound right? No other additions or deductions. I'm really tempted to tell him to cancel private medical, we're not using it and paying over a grand for a benefit that we're not using seems ridiculous.

You'd expect him to be paying 40% on the benefit on those figures, so it seems high - but is it including another 50% as the 1st payment on account for next year? There would then be another one in July, and other things remaining equal that would cover his tax for 2021/22 as well.

£3k private medical seems high, my work one is just under £500 benefit in kind.

Thanks Squirrels - it could be that, I was just trying to make sense of the figure as it seemed random. We are checking with his work but they’re rather slow… It covers the family and he has a pre-existing condition so I think that explains the amount, but even still with me now down on part time I’m not sure we can justify it. Thanks for taking the time to reply - really appreciate it. I was a bit flabbergasted when we ran the numbers this afternoon!

The tax charge seems right if that's the value of the insurance but like a pp it seems high. Mine is about £800 I think for me and 2 children.

@Dollywilde

Just submitted ours for the first time based on our first year of receiving Child Benefit and I'm ... DH's P60 headline was £54k plus £3k of taxable benefits (Private Medical).

We'd received £650ish in CB and have been told that the high income CB charge is £450 - I'm guessing this is repayment of 70% as PMI puts him on 57k.

However, on top of this £450 (which we'd pretty much expected) there's a £1164 tax charge which seems to be for the £3k of private medical which seems obscenely high - so we're now facing a bill of £1600 to be paid by the end of the month. If any knowledgeable people are still on this thread please let me know, does this sound right? No other additions or deductions. I'm really tempted to tell him to cancel private medical, we're not using it and paying over a grand for a benefit that we're not using seems ridiculous.

I learnt the lesson the hard way the first year as well. If you submit by end of December you can roll any amount due onto your tax code. If it's January you have to pay it!

@dollywilde are you sure he hasn’t already paid tax on that? Through PAYE?
DH company car is taxable benefit but they deduct the cash equivalent benefit from his personal allowance to factor it in. So the only thing the self assessment is for (for us last year assisted by someone from HMRC over phone) was to calculate the cb charge.
So for your dh it would be personal allowance 12500 less 3000 bik medical so his personal allowance 9500?
Double check if he’s already paid tax on it!

Yes it seems odd to pay tax on the PM if you are only doing the self assessment as it would mean otherwise you are not paying it?

So do I need to do the self assess this month and would I just request a P60 from work? Or is it at the end of the financial year?

If it is his first year of the medical benefit then HMRC won't know about it until after the tax year end when the employer submits the p11d. At that point they should adjust the coding so that the correct tax is being deducted, but this can take some time to flow through.

There is space on the self assessment return to enter tax already collected through coding, and due to be collected through coding. He'd need his coding notices for current and future years to assess this.

When you complete the self assessment it gives you the full calculation, and this will show the make up of the tax.

He might be on a M1 code for some reason, this treats each month separately instead of calculating PAYE on a cumulative basis.

HMRC have a review programme and generally catch up on incorrectly paid PAYE, but again it takes sole time to flow through, Oct onwards following the relevant tax year.

@Newnormal99 dire that mean you just pay it later?

@fromdownwest I see what you mean. I could pay more into pension and maybe keep more of the CB

If it makes a difference my salary was under £50K and then went up to £55K just as I started mat leave

So I am thinking I definitely haven't earned even £50K this year with reduced maternity pay

The self assessment due for payment by the end of this month is for the 2020/21 financial year. So there's no need to do anything yet if you're looking at this financial year.

You'll need to register for self assessment first. This page tells you all about it. www.gov.uk/self-assessment-tax-returns?gclsrc=aw.ds&gclid=Cj0KCQiA8vSOBhCkARIsAGdp6RTBG9STFUsKVft-laCicLEynkCJUcYtIEvKYCJoQv-duXbCpQs2KfgaAhteEALw_wcB

After you register they send you a paper form which you need to progress further. It's a bit of a faff but once registered it's straight forward. I did it for the first time last year and had no trouble.

Self assessment covers the period 6 April to following 5 April.
The self assessment return is due the 31 January following that.

So 6 April 2020 - 5 April 2021: return due 31 January 2022 (now).

If you have income or gains which need to be returned you should notify HMRC by 31 October (although I've never seen a penalty for not doing this) and get a UTR (unique taxpayer reference) to submit your return.

Your employer will/should have given you your P60 by 31 May following rhe tax year end.

If you don't need to do a review HMRC carry out a PAYE check and adjust your tax through your coding as mentioned previously. If this happens they write and tell you so you should know.

It's a good idea to get a government gateway login so that you can look at your account online. There is also an app.

If you don't need to do a review return HMRC carry out a PAYE check and adjust your tax through your coding as mentioned previously. If this happens they write and tell you so you should know.