Paying back child benefit - earning over £50k

[Reluctantadult]

Dh has been given a pay rise to £52k. I think this means we'd have to repay a portion of child maintenance by doing a tax return every Jan. We have 2 children Is it financially worth getting the £2k over the threshold? Not sure how would work that out, not brill at maths but will have a go. The process sounds like a right faff too. Does anyone have any experience of doing it?

You mean child benefit not maintenance.

You pay it back on a sliding scale between £50-60k.

It is worth looking at him making pension contributions to keep his relevant gross income below £50k.

I think you mean child benefit? If he's only 2k above, then it's definitely worth doing as you'll only pay a proportion of it back. And there are other benefits to you continuing to claim it eg if you have a period out of work or not earning enough NI contributions it will help towards your state pension.

We are in the same position and pay some back through DH's tax return, although he has to do a tax return anyway

www.gov.uk/child-benefit-tax-charge

When this first came out probably about nine years ago, I stopped claiming, because I worked full time myself so it wasn’t worth taking it and doing the Tax return.

i guess it depends upon whether you pay NI or not.

Is that your DHs salary before any tax is paid? Child benefit is done on "adjusted net income" - look here to calculate www.gov.uk/child-benefit-tax-charge

If that is his adjusted net income then it's likely worth looking at pension contributions to get it below 50k.

Op if you’re not paying NI you can claim just the NI part of CB.

Child maintenance is paid to a resident parent for any children when parents split up. I think you're talking about child benefit.

Does he make pension contributions? I am pretty sure it's calculated on salary after pension contributions are deducted?

My husband does his tax return, it's pretty simple & quick but I suppose his income is stable so no digging through paperwork.

He is at the higher end of the scale, and we never bothered to stop because initially I wasnt working & now it's just habit.

You're talking about child benefit
He could look at increasing pension contributions.

At only £2k over £50k he'd only pay back 20% of the child benefit so you'd still have 80% of it

Oh balls, yes child benefit. Idiot (me) ...

I've reported my post asking for the title to be changed to child benefit.

His salary would be £52k before any deductions. He'll have to work out where he's at after pension contributions by the sounds of it then.

It's a pain, having to suddenly do a tax return. But easy to do. And you only have to pay back a minimal amount, say £105. So it's still worth it because your getting the £1.7k. Or whatever you get.

Obviously depends on individual circumstances, but I think around £56k is when the child benefit becomes an issue at my work. Someone did a spreadsheet about it all!

Well he should be putting at least 5k into pension so you're fine to keep claiming the full amount abd won't need to do a tax return

Is it just the pension contributions that come off?

You need to look at the type of pension contributions.

If it is an employer scheme and the contributions are deducted before tax is calculated (not all are done this way) - then you just use the p60 figure, and pension contributions aren't deducted (as they have already been accounted for in reducing the p60 figure).

If it is an employer scheme where the contribution is deducted after tax is calculated and the pension scheme reclaim the tax (and in this case you have to ensure you also claim any higher rate tax relief from HMRC) OR a personal pension where you pay net and the pension scheme reclaim the tax THEN you deduct the gross pension contribution (net plus tax) from p60 income.

Gift aided donations are also deducted (again net plus the tax element).

If the pension contributions he current makes don't take him below the limit then he can make additional contributions, either via his employer of they allow or, or via personal contributions direct to a pension provider or SIPP.

We’re in the same boat op- my bonus tipped us over the threshold last year. I’m registered for self assessment but does anyone know if we should expect to pay a lump sum, or if it can be taken through adjusting my tax code (I’m on PAYE). My fault for not twigging, but just not sure we’ll be able to rustle up a lump sum by the end of Jan.

I’d throw the 2k in pension. I’m having to do a tax return for the first time this year. Keep meaning to do extra pension payments. I’m on nearly 60k now after a promotion so not putting all that in pension but going to do £100 voluntary extra payment for next 20yrs to retirement

Why do they make this so complicated...!

Of you want it adjusted in your PAYE coding you need to get your tax return submitted before the end of December, tick the relevant box on the return and the tax owed has to be below a certain amount.

Thanks! Sorry for hijacking the thread OP!

No bother glad it was useful to you too squirrels.