Child benefit- self assessment

[LB600]

Hi All,

I'm currently on mat leave, and I had a call with my boss this morning to tell me I will be receiving a 3.3% increase on my basic pay. Now obviously every little helps with the current climate, and I'm really grateful for this, however adding this increase on my basic to my car allowance, and another company benefit, my total combined pay per annum is £320 over the £50k threshold for child benefit.

Obviously the amount per annum you receive (first child) would far outweigh the extra tax I'd need to pay, my question is around the self assessment part.

I've always been a PAYE employee and the thought of SA for some reason puts the fear of God in me for fear of doing it wrong. I think per year the tax would be less than £150 so it would be worth doing the SA, I just wanted someone else's take on how much of a b*llache it is to complete?

I have the government gateway access (which i assume is where the SA is done?)

I have also seen other threads mentioning that if I pay pension contributions (I do through being auto-enrolled in our company pension) that I deduct this, this would then take me back under the £50k threshold for the year- so is the SA needed? Or does it not work like that.

Any help really appreciated!

I do it for my husband each year. It's quite easy.

I do SA for a different reason (stocks and shares) and it's really not that bad. If you're just employed by one employer then you just wait for your P60 which has most of the figures you will need. If you're paying some higher rate tax and giving to charity using gift aid you might even get some tax back (make a note of any charitable donations throughout the year). You will also need things like income from savings interest and might need your P11D if you usually get one.

@UnbeatenMum Thank you.

Interest on savings- would be zero! and no charitable donations and no P11D.

So I assume I wait for my next P60 next April 2023 to reflect my pay increase for this year, and complete the SA in Jan 2024? is that right? Sorry I really am an idiot with all this!

@UnbeatenMum Sorry being a moron, i'll be due a P60 to reflect the pay increase this month, so use that to do the SA next Jan?

I think January is the cut off for paying back any tax you owe. The self assessment is done a bit earlier I think (September/October ish?). You can start self assessment earlier than this though. They've just sent me a link to do mine for the 21-22 tax year.

It's quite straight forward. You can also give an estimate of your earnings for the coming tax year so you pay as you go rather than getting a horrible bill at the end.

I think I had to complete the SA for 20-21 by October 2021 and pay by January 22, but I can't remember exact dates

@LB600 you can do the tax return as soon as you have the information, you don't have to wait until January. So you'll get your P60 some time after April 6th 2023 and then you can do the SA any time between then and the January 2024 deadline.

www.gov.uk/self-assessment-tax-returns/deadlines shows the deadlines. October is for paper tax returns. Your situation is so straightforward you should do an online one unless you prefer paper.

I did mine yesterday. If you do it online you don't have to do it till next January but I hate it "hanging" over me so I just do it. I think it took me an hour or so yesterday to do mine and DHs, main issue was finding the passwords.

If you do it on paper it needs to be done by October.

You also need to register, can't remember how you do it but if you have a government gateway it will be straightforward.

[quote LB600]@UnbeatenMum Sorry being a moron, i'll be due a P60 to reflect the pay increase this month, so use that to do the SA next Jan?[/quote]
Unless they are backdating the payrise it will be next year's P60 that will show the increase. Presumably you are under the £50k limit for 2021/22

When do you return from ml? Unless imminently you won't earn over 50k for 2022-23 and may only just for 2023-24, so the first return you may have to do will be in January 2025. Will pension deductions not take you back under 50k anyway?

It's not what you asked but can you increase your pension contributions to reduce your income?

I didn't think you needed to do SA if the pension contr bring you back under the threshold?

My DD had a nightmare with this . She ended up with a tax demand of £6000 . She cancelled her child benefit but 2 years later was still getting tax demands which she couldn't get sorted because of covid. Eventually she got through to someone in the tax office at the end of 2021. It turned out her child benefit hadn't been cancelled even though she wasn't receiving it . They managed to sort it and instead of her owing £6000 to them , they refunded £4000 to her !

Seconding the fact that the £50k cap is exclusive of pension contributions (I hope!) so you might not need to do this?

Thanks so much everyone!

If the £50k threshold is minus my pension deductions, I definitely contribute more than £320/ year to my pension so would that negate the need for the self assessment?

Why is everything tax related always so unintelligible, I think they do it on purpose to confuse people like me!

That is my understanding This page might help! Explains what income is covered. www.gov.uk/child-benefit-tax-charge