High Income Child Benefit - Help please!!

[alypee]

I'm really hoping someone can shed even a bit of light before I tear my hair out.

I'm trying to complete a self assessment return for the first time as we are liable for the High Income Child Benefit Tax.

(I apologise massively in advance for my complete ignorance on everything tax related)

DH earns between £50,000 and £60,000. We applied for Child Benefit in Nov 2011 and they backpaid us 3 months.

For the period between Nov 2011 and then end of the tax year we were paid £423 in Child Benefit, so was expecting to pay back a little over half of that, which I have kept aside. I have spent the last two weeks trying to complete the self assessment (which has been a nightmare in itself) and having completed it it says we owe them £523!! How can we own more than we were given?!

We dont have this to pay and the panic is making me feel physically sick constantly.

Does anyone have any clue what I may have done wrong?

I tried calling HMRC today, was on hold for 40mins only to be told that they could only speak to my husband. He's a teacher so is never going to be able to ring himself and the phone line isnt open weekends. Gahhhhh.

Claim cos u get state pension contributions paid!
I've written to my MP, cos partners of highearners might not get their full pension cos of this.
Maybe he can answer a few of my questions!

You can have the claim without the payments in order to get the NI credits but I wouldn't stop the payments unless you were sure you wouldn't get anything unless you really don't need or want what you would get.

You can (sometimes?) tick a box to get unpaid tax taken from next years tax code (ie your tax free allowance of c£12k is reduced) so you don’t have to pay it immediately - try that?

You can claim the NI credits and opt to not receive the money so you don’t have to worry about a tax return and paying it back

I assume that’s what your MP will say!

(I do personally think it’s an utterly ridiculous and unfair system. And yet it’s “not worth it” and “too much administration” to means test pensioners winter fuel allowance. They could just use the exact same process as they do for child benefit)

1. your partner deals with it
2. top up pension, use salary sacrifice schemes etc. for travel to reduce the amount you have to pay back

But opting out isn't widely known.
Nor is the pension aspect.

My parents wanted to send back their winter fuel payment for those more in need, they were told too much admin!

How are you getting on OP?

Just done Dh's. I knew he owed nothing because he's increased his pension massively. It says He owes £1.80. I know that's not correct but I can't be bothered to fight. For less than £2. I can't pay it yet because it takes up to 72 hours to be logged.

I haven't RTFT but don't forget about donations made under Gift Aid, these qualify for higher rate tax relief. These essentially extend the basic rate band, always worth making any donations in his name, assuming you're a basic rate taxpayer, and keep a log through the year.

Jumping on here as my husband has filled in his form and we are both wholly confused. Can you deduct employee pension contributions (ie pension contributions made before tax) and if so where do you put this on the self assessment form? Everything we've read online seems to indicate you can, the HMRC calculator seemed like you could but was also confusing!

Nope, they won't have any effect. Your P60 figure will take account of this, otherwise you'd be essentially double counting the pension contributions.

Do be sure to include Gift Aided donations though - these serve to extend your/his basic rate band and therefore reduce the amount that has to be repaid.

Also - presumably he is in a Union? You can include that as an employment expense which will help - and if he's never done that before they can backdate it.

You really needed to have got this files by 31 December to get things included in tax codes, but you may have luck by ringing up and talking nicely to someone (it's always worth a try).

Oh, and I do my husband's tax return too. I'm better at that sort of thing than him and it's kind of what I do for a living. If he needed to he would, but as a couple we tend to divide jobs up in terms of who is better at them or whatever. Not sure why you're getting so much grief about it!

Sorry just realised I repeated myself re gift aid!

Well it is probably worth it if op doesn't earn much!

@Passthewinebottle I feel like a complete idiot (and I'm not!) because I really don't understand how you'd be double counting anything. His income is his income minus his pension contributions (NI tax etc) I mean we'll pay what we owe but it is clear as mud! I think my husband made one £50 donation last year sadly!

Not an idiot at all - tak is very taxing for those who don't work in it! Are his earnings purely from employment? So his P60, if he has one, will usually already have taken his pension contributions into consideration.

So, if he earns £60k & makes 10% contributions, his P60 would then say he'd earned £54k x

@AyeCarrumba Agreed. I get £202 per month, and even if you have to repay half, it's still £100 per month. We generally only advise clients to cancel as they get near the £60k mark, although they are often completing a tax return anyway.

@Passthewinebottle on that might be why I'm confused! No, his income is £54k and his P60 says £54k but he does pay into an employer pension scheme (not much admittedly!) I can see the total amount on his march payslip
of what he contributed as well as his employer. I can't see pension contributions anywhere on the P60 unless I'm looking in the wrong place. It's only one page right? 🥴

I’m sorry to jump on the thread OP but I have a small related question. I’m a single parent in receipt of CB and started earning £52k pa through promotion from September 21.

For the first time ever I will need to pay some back; I called HMRC when I got the salary increase in my September pay packet and they have adjusted my tax code accordingly — apparently I will likely need some reconciliation but shouldn’t be a huge amount. Anyway my question is — as my pay only increased to >£50k in September, when do I need to do the self assessment? Sorry to be so dumb; I’ve never completed one before.

What does your P60 for 21/22 show as gross income (before tax)?

Sorry posted too soon! Your P60 may not show over £50k until the current tax year (22/23). You can do the return from 6th April 2023, as soon as you get your P60. If you get a P11D, you'll need to wait for that too x

Look at the p60 for 2021/2022.

I'm guessing a bonus may have increased the annual earnings.

Could be worth checking with payroll what kind of scheme it is... At £54k, he'd payback 40% of the CB, but if you submit before Dec 30th, he can have it coded into his tax code x

I’ve just done mine too and agree the pension bit is confusing. My salary is actually much lower but I earn variable commission and this year it took me over 50k. In the end I just used the figure on my p60 as wasn’t sure how or where to put my pension contribution. I’ve paid about 60% back.

I am a single parent and I do find it annoying that a couple can earn £99k and claim CB but as a lone parent paying for everything on my own I have to pay it back. I guess there has to be a cut off but feels a bit harsh

@Mrssalvatore123 it is very harsh! I only got back into work last year and I'm working part time on a very low income. I think between the two of us we earn slightly over £60k. I should start earning more this year thankfully, but I really rely on the CB. Maybe I need to write to my MP. Not sure why they did it that way.