Child Benefit High Income charge

[Worriedmum40284]

Hoping someone may know a bit more about this. I will be starting a new job next month which will take my salary above the £50k mark for the first time. I realise this means the High Income Child Benefit Charge will apply.

Does anyone know if this is correct? I've worked out my pension contribution is 8.5% and have deduced that from my annual salary. Is that the amount that I use to calculate what I need to repay, or am I missing anything?

I was going to start a similar thread. The online advise is fairly limited and unclear

It's not the easiest to work out is it? Figures and finances are not my strength so was hoping someone might be able to help!

Another question - do you get a reminder when you need to do the self-assessment or do you need to keep a note of it?

I can't find a straight answer either. My net is under £50k so I'm thinking I'm not having to pay at the moment?

It applies to 'taxable pay'. So after pension contributions. So some examples:
£55k salary, 10% pension contribution means taxable pay is £49,500 - so still entitled to full child benefit
£57k salary, 10% pension contrition - taxable pay is £51,300 so start to lose child benefit. But it is tapered between £50k and £60k - you don't lose all of it.
You lose 1% of child benefit for every £100 of earnings over £50k. So in the above example you lose 13 x 1% so keep 87% of child benefit

Keep your net pay under £50k and you can keep CB. I increased my pension contributions to make sure. More knowledgeable posters will be along too to explain it in more detail.

You could also put the excess earnings over £50k into a private pension (eg if you have a DB scheme via work) or pay extra into company DC scheme, and keep 100% of child benefit

It is calculated on gross pay (ie before tax) but after pension contributions, and including bonuses etc

i do a self assessment every year in order to make sure I don’t owe anything. I find it really quick and easy to do. I know that’s not exactly the advice you were looking for but I also found the online advice confusing.

Also bear in mind that we are half way through the tax year so if your total annual earnings are below £50k you don't need to worry about it at all until next April.
As pp said it's salary after pension before tax and NI.

I believe it includes benefits you get from your job too. So thinks like free health insurance or life assurance that might appear in the taxable column of your payslip.

The easiest thing to do in your situation is carry on claiming child benefit and see what your taxable income is in April. Then register for self assessment if over £50k. The form is fairly straightforward and you can pay anything you owe through PAYE by an adjustment in your tax code

Mumsnet should do a guide as there are frequent posts and unnecessary panic over this.

If you change salary mid year it is unlikely you will exceed the threshold for 2023/24 so the earliest you would repay by self assessment is January 2026(for 2024/25 tax year) and even then it is probably less than you will receive. The figure on your p60 applies.

If you hang on the phone to HMRC forever, and say 'Alice in Wonderland' repeatedly, as a response to every bot-computer-generated question, eventually the bot says, ' please wait, we are connecting you to an actual human'.

Then you can give them your figures and they're quite helpful - you can do this after next April when you have your entire year's income (if it's all PAYE, ie on your wage slip).

Heads up - 'Alice in Wonderland' works on energy companies, DVLA, finance - all bots quickly re-route you.

Thanks all, that's really really useful (especially the Alice in Wonderland tip!) Think I've got my head around it now.

As @LIZS and others pointed out, I expect it probably won't apply this year as and will be the 24-25 tax year that it kicks in but will double check in April.

Good tips too about increasing pension contributions, I will look into that.

Thanks all!