High income child benefit charge

[nopenotplaying]

I filed my 22-23 tax return a few months back. Had to do so as I needed to pay back some of the benefit, I opted to pay it back via my tax code. It's been a killer as it was quite a bit to pay back due to a payrise and promotion.

For 23-24 I intend to file as early as possible and do the same via tax code. P60s don't normally come out until June time. In the interim will my tax code remain adjusted? Again I've had a payrise so expect there to be more to pay back this time. But I'm hoping it's just the difference between last year and this iyswim.

Just to add. We are a single income household once my pension contributions have been deducted my income is about 56k before tax. This is frustrating, I cannot claim full child benefit but a two earner household can earn much more before they need to pay back any child benefit.

Thank you.

I agree, the way the taper has been worked out is very unfair if you are in a single-earner household compared to a dual earner household where both earn just under £50k. It’s also frustrating that the government won’t increase this threshold with inflation either.

However, depending on whether you can afford to, one way to manage this would be to pay more into your pension to bring your take home down to under £50k. Because you’re paying higher rate tax on anything over, you’re giving up £6k — but only taking a hit of around £3600 take home, then when you factor in the CB you’d be keeping (£1100 ish for one, or £2k ish for two) you’re not losing out on anywhere near £6k but getting the full boost to your pension.

Plus you then don’t have the hassle of paying it back later in the year.

I appreciate the numbers might not add up for you to do this (and also need checking), but if they do, it might be worth considering.

Thank you for your reply, I actually have 5 children. But claim for 4, one is older and working. So my child benefit is about 3700 per year if I had it at 100%

Can you put enough in your pension to bring down your income below £50k and keep the child benefit?

P60s have to be provided by 19 May

Tax accountant here, if you can then paying into your pension is really worth it, especially as you are claiming for so many children.

Then in sounds like there would be minimal (if any) impact in terms of take-home if you put the extra into your pension to bring you below 50k and claimed the full CB, but you’d then also have the benefit of the additional pension contributions

Thank you all. I will give it some more thought. If the government don't adjust the thresholds this will mean I'm stuck on the same income level? I'd have to not progress my career, the next step up would put me back to need to repay child benefit. And then financially I'd be no better off/very little for it to be worthwhile. What when I get my annual payrise, even though it's small will I need to adjust my pension contributions annually?

@nopenotplaying your adjusted income is reduced by 100/80 of your pension contribution. So if you got paid £56,000, you’d want to put £4,800 (£6,000 x 80/100) into your pension to bring you down to £50,000 and keep all the child benefit.

Yes, that’s effectively the case. But when you think about net worth rather than income, that’s where you’d see the benefit of the extra pension contributions.