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Child benefit higher rate tax

3 replies

Cherms · 20/07/2023 13:48

I'm a bit confused about the advice on gov.uk so thought I would ask here.

My example:

If my salary was £55k but I put £5k into my employer's pension scheme through payroll would I still need to pay back half of the child benefit?

My new employer has a compulsory high level of pension contribution which pulls my actual salary below £50k but I don't know what that means for the child benefit. I've always earned less before.

OP posts:
Merrow · 20/07/2023 13:51

Yes, you'll be under the threshold as your pension contributions are taken into account. It's called "adjusted net income", some information about it here

Personal Allowances: adjusted net income

How to work out your adjusted net income and the circumstances when it can affect your tax liability.

https://www.gov.uk/guidance/adjusted-net-income

Cherms · 20/07/2023 17:28

Thank you for that like as it's this step I hadn't seen before. I had only googled pension contributions and child benefit and it didn't explain this nuance.

Step 3 - take off pension contributions
If you made a contribution to a pension scheme where your pension provider has already given you tax relief at basic rate, take off the ‘grossed-up’ amount - what you paid plus the basic rate of tax.

So, for every £1 of pension contribution you made, take £1.25 from your ‘net income’.

OP posts:
hedgehoglurker · 20/07/2023 18:57

It is usually the p60 taxable income figure.

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