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Original poster

Child Benefit-Please Help Me!

13 replies

Redstar2015 · 02/08/2023 13:05

Hi,

I am thoroughly confused on how to calculate if I would be charged the higher rate tax income for child benefit. I don't think I would since my understanding is it's based on your adjusted net income, but I want to be sure I'm looking at the right figure on my P60. I'm basically looking at at the box on the P60 that says "Pay" and "in this employment." This figure is lower than 50K but my gross salary is higher than this which is why I want to be absolutely sure. Can someone dummy proof this for me so I don't get a surprise payment when doing taxes next year?

OP posts:
Step5678 · 02/08/2023 13:09

Yes it is based on your adjusted net income. I assume your gross salary is reduced by pension contributions, meaning your taxable pay is lower? If so, the taxable pay is the relevant figure for child benefit tax charge purposes

Comefromaway · 02/08/2023 13:11

What do you mean by the fact that your gross salary is more.

The in this Employment figure (or rather the Total for Year box) should be your total taxable income before tax/NI deductions.

Do you pay into a pension and is the pension deducted at source (should show on your payslips) as pension contributions are not taken into account.

Original poster
Redstar2015 · 02/08/2023 13:21

Comefromaway · 02/08/2023 13:11

What do you mean by the fact that your gross salary is more.

The in this Employment figure (or rather the Total for Year box) should be your total taxable income before tax/NI deductions.

Do you pay into a pension and is the pension deducted at source (should show on your payslips) as pension contributions are not taken into account.

All I know is that my latest promotions letter lists my salary as above 50K. However, the P60 shows my salary as lower than this. I was assuming this is due to pension contributions plus I claim childcare vouchers which would also be deducted from my salary. I am totally lost as no finance expert so probably getting something wrong when referring to net and gross income.

OP posts:
Original poster
Redstar2015 · 02/08/2023 13:22

Step5678 · 02/08/2023 13:09

Yes it is based on your adjusted net income. I assume your gross salary is reduced by pension contributions, meaning your taxable pay is lower? If so, the taxable pay is the relevant figure for child benefit tax charge purposes

So is taxable pay what is listed on the P60? That's what I'm trying to figure out before I apply for child benefit.

OP posts:
ZacharinaQuack · 02/08/2023 13:27

Yes, that will be your taxable pay. Pension contributions won't be included on your P60.

Comefromaway · 02/08/2023 13:29

A work colleague of mine made extra pension contributions in order to get his salary below £50k.

Pension contributions are not listed on your P60

Step5678 · 02/08/2023 13:51

That's it! The box on your p60 labelled "Pay in this employment" is the relevant figure.

Tbf it's worth applying for child benefit anyway. The worse case scenario is that you will have to pay a bit back if your pay goes slightly over 50k, but you would still keep some of the benefit unless your taxable pay goes above 60k.

As another poster said, a pension contribution (or charitable donation) will bring your adjusted net income down if you need to do so

Original poster
Redstar2015 · 02/08/2023 14:18

Step5678 · 02/08/2023 13:51

That's it! The box on your p60 labelled "Pay in this employment" is the relevant figure.

Tbf it's worth applying for child benefit anyway. The worse case scenario is that you will have to pay a bit back if your pay goes slightly over 50k, but you would still keep some of the benefit unless your taxable pay goes above 60k.

As another poster said, a pension contribution (or charitable donation) will bring your adjusted net income down if you need to do so

Oh, thanks for confirming! Looks like I’m good then. I had asked a few friends but nobody seemed to know.

OP posts:
ZacharinaQuack · 02/08/2023 14:23

Also worth mentioning that if you have a partner and they earn more than you, they are the ones that have to pay back the tax, even if you're the one who applies for the child benefit.

Original poster
Redstar2015 · 02/08/2023 14:27

@ZacharinaQuack , I’m definitely the higher earner so should be good.

OP posts:
ZacharinaQuack · 02/08/2023 14:29

@Redstar2015 that's good - I applied for child benefit and have condemned my partner to 18 years of having to do tax returns! ;)

TeleTropes · 02/08/2023 14:55

Did you get your promotion between 6 April 2022 and 5 April 2023? If so, just because you’re okay this year doesn’t mean you’ll be okay next year and you’ll need to make sure your net income between 6 April 2023 and 5 April 2024 is still less than £50k.

Original poster
Redstar2015 · 02/08/2023 15:20

@TeleTropes It was in August 2022. I’ll keep an eye on pay increases but am planning to increase my pension contributions anyway so should be okay for awhile.

OP posts:
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