Child benefit threshold, keep claiming anyway?

[89ghud]

I'm about to go from earning under the threshold, to completely over it (even with pension contributions factored in) I'm not looking to put more into pension etc to get the amount down. I was wondering if it was just worth continuing to claim it, put it in a savings account and do a self assessment end of the year to pay it all back. I figure I can make a bit of interest off it, and you never know when/if circumstances will change and you can only backdate so much. Am I able to do this? Anything I'm missing that makes this a terrible idea?

If you have a household where one person is earning less it's a good idea to keep claiming as it builds up NI credits. I don't know if it's worth it if you're both high earners or if you're a single parent.

You can claim it but opt out of having the payments so as pp said, a low earner would still build up NI credits.
I’m not sure about your idea of earning interest on it, surely it wouldn’t be much?

I moved in with my gf shortly after this came in. We didn’t discuss financial things at that point, i contributed x to the household.

3 years later, i get penalties, fines and backdated repayments and interest because she was claiming CB.

Problem was, I’d just lost my job, had a small amount of saving I could access, they just wanted their pound of flesh to repay for money I’d never had. gf couldn’t help, she was in debt herself so every penny was part of a payment plan, last hangiver of her failed marriage.

At the time, the loss of the job was a major issue, was unexpected. Suddenly having this 6k bill to repay - drove me to drink and then a suicide attenpt.

Dont play games with hmrc. They are the scum of the earth. They denied writing a letter I had from them because I’d specifically asked when I moved in, did it apply to me.

In the end, penalties mounted up - but a friend got a me a job, and I was able to get a loan to pay them their pound of flesh.

If a friend/relative (ie grandparent) is providing regular child care, I think they can claim child benefit and get the NI credits (if under state pension age) and then the money goes towards expenses (food, clothes, etc) of looking after them.

“Looking after someone else’s child
You may be able to get Child Benefit if you’ve got an informal arrangement to look after a friend or relative’s child.”
www.gov.uk/child-benefit/eligibility

What sort of ‘lower’ income does child benefit pay your NI contributions for?

I do this. Interest free loan! Also I figure if I can ever afford to go part-time I won't need to do a new claim.

It is called a lower earnings limit and adjusts each tax year. For current 22/23 tax year anyone earning less than £6,396 per year won’t get a full NI credit towards state pension for the year. You’d have to top up with voluntary contributions.

Anyone earning above this amount will receive full National Insurance credits to protect their state pension position, even if they are no longer liable to pay NIC contributions.

BUT anyone claiming child benefit gets NI credits so if CB is claimed entire tax year, they have a full year towards state pension. (It’s tracked by weeks).

We don't need the NI credits we both work full time. I'm not trying to play a game, presumably fines and interest etc were if you did not do a tax self assessment? I would do one on time, it just seems unnecessary stopping the claim when a self assessment is pretty easy, if I did suddenly have to stop working for whatever reason my income would be adjusted for the year and I would pay back less, whereas if I reinstated the claim I could only backdate a month? No reason to catastrophise to that degree really, but other than filling out a tax form I can't see what disadvantage there is to claiming the money?

I couldn’t be arsed to do a self assessment for the meagre amount of interest I’d get and we don’t need the NI credits so just opted out. If you can be bothered, are sure you’ll remember etc, there’s no reason why not to do what you suggest.

I wouldn't bother. The amount have hassle I've had...

@Valhalla17 what kind of hassle?

My accountant told me to carry on claiming as otherwise it's a pain in the arse getting a NI number when my children turn 16.

My partner earns over the threshold, and we have to pay most of it back via the self assessment form but its definitely worth the hassle for the little bit of cash that we do get to keep. They send reminders to fill it in and it means our children have a good start to their savings.

I got into a palaver following some health issues and they penalised me with fees. It just gave me such stress and so I just told them to cancel my claim, it wasn't worth having yet another "thing" to think about and do. I'm a lone parent, took me years of hard graft to earn over the threshold and they were pretty unhelpful when I had my health matter and missed a deadline.

It also annoys me about having to complete the self assessment, unless you're self employed it's not like they don't bloody know what you earn is it?! I hate all the additional data gathering and have to pay it all back anyway...

This happened to us as I didn't work as I was taking care of my baby and my husband went from under the limit to over the limit changing jobs. As soon as he moved jobs, I called and stopped CB (we'd had 3 payments for that tax year before he moved jobs) My husband then got a letter from HMRC 18 months after we stopped the CB to say we had to pay it back, but it's cost £250 for the fees on top of the 3 months CB payments for the tax self assessment.

Have you crunched the numbers? Child benefit is going up in April, to £24 a week for the first child and £15.90 for subsequent ones. Assuming you have two DCs, that works out to an average of £173 per month. Put that in a monthly savings plan paying, say, 4% annually and by the end of the year you'd have earned... About £45.

Hardly worth the hassle IMO - but then I always groaned at self-assessment time.

We carried on "claiming" it once it became means tested, but only because I never got round to stopping it! But we both have to do a self assessment anyway. If you don't have to do self assessment, I don't think it would be worth it for the tiny amount of interest you would earn.

@Squiblet £45 to fill out a form seems a pretty could return to be fair?!

*good

I'd be quite impressed if you could get 4% to be honest, given you can't tie the money up for the whole year.

I'm getting 5% at the moment from my Nationwide current account (although only for a year)

There would also be tax on the interest, so not even £45.

Once you’ve started with tax returns it’s hard to stop them, even when you no longer officially need them.

I took the ‘can’t be arsed for a life silly tiny gain’ view!

I’d heard the argument someone made upthread about it being easier for children to get NI numbers if they’re already in the system, but I really don’t think it’s worth trading quite a lot of hassle over the next 16 years for one potential bit of admin then.

Certainly won't be any tax on our interest, we don't have that much.

I thought that was really good. But it's only on the first £1,500 (0% after that) and you have to pay in at least £1000 per month. So not so good!