Child benefit - high earner threshold

[Mudonstairs]

I am thinking of applying for child benefit now that the threshold has been raised to £60k. However, because my husband earns £69k we would have to pay some of it back so I’m wondering if it’s worth the hassle. We could do with the extra money and it would genuinely help us get things needed for our DC that we often put off until we can save enough.

Does anyone currently have experience of this process? Do you literally have to do all the calculations yourself and pay it back each year? How have you managed to keep track of it all and has it worked out well for you?

I am worried that we might get the calculations wrong and in future it comes back to bite us. Im not the best with numbers so I don’t want to risk accidentally committing benefit fraud!

It just seems a ridiculous way to give people benefits tbh and I’m sure it’s just the governments way of deterring us from even bothering, but at the same time why should we be missing out! I wish you could just tell them your salary and then they pay you what you’re entitled to, rather than giving you the set amount that you have to work out how much to pay back.

Your husband will need to do the self assessment tax return. Remember certain things are disregarded in working out your taxable income (like pension contributions) so his taxable income might not be that far over the 60k.

Hi OP, as above your husband will have to do a self assessment return to pay back some. If he earns 69k then he’d likely have to pay back around 50% of it.

If you aren't working enough hours to pay your full NI contribution then you should definitely claim child benefit for the NI credits. Self assessment is quite straight forward.

Thanks for the replies so far. I am aware that we/husband would need to do the self assessment tax return each year. I was just wanting to hear from people that already do this and if it’s worth it for them as a family.

I do it. But it’s a total pain in the arse and I end up owing money or being owed money every year. I don’t understand why it needs to be such a ballache.

It’s not very difficult to do self assessment once you’re in the system and know what you’re doing. We do it because we do self assessment anyway so it’s not extra hassle to add the child benefit (& we stick it all in high interest accounts / investments each year so make a bit of money on it each year). If we were only doing it for the child benefit I’m not sure we’d bother.

We were over the 50k bracket and dh did tax return last year, was quite straightforward and definitely worthwhile. He increased his pension contributions to reduce income for child benefit calculation so that was a win win as his pension is far smaller than it needs to be anyway and we were able to keep more than 50% of cb.

I do a self assessment and it calculates if you have to pay any back for you, I make extra pension contributions so it’s ended up where I’ve actually been due a repayment as that reduces level that my income is and I also get highe relate relief on the pension contributions. if you are really worried rather than not claiming why don’t you claim and just put it all in the seperate bank account for a year then anything due to be repaid pay out of that and balance is yours to spend, I know this would mean you wouldn’t have the money for a year but if you don’t claim you won’t have it either

Yes we do it, as we have 2 DC we still get a good amount extra each month after the pay back.

As a family unit you'll still come away with around £13 for the first child and £8.50 per subsequent child per week after repaying the tax. That's about a grand a year if you've 2 kids. It's always paid 4-weekly unless you're able to request weekly payments (in specific circumstances).

As above if DH is earning £69k before pension contributions he might not end up paying very much, making it even more worthwhile imo.

It’s really easy to do. I just put it all into a savings account, pay back what is owed then what’s left goes into the family pot.

Thanks. I guess when you mention the figures it certainly sounds worth it. We only have one child but are hoping to try for another later this year.

No. I ended up paying £3k back when they changed it all those years ago. After that it just wasn't worth the stress - for me - to have to deal with all the form filling and keeping money aside etc to pay back the bill.

It might be an easy process but after I got stung I didn't want to take the chance again.

That’s what I was thinking we will do, so we don’t dip into it until we’ve repaid. I’m worried about what happens if you’ve underpaid. Do they hit you with a bill to pay or just dock it off your future child benefit payments?

This is one of my worries. So when you say you had to pay £3k back, do you mean you had underpaid when you did your self assessment and they later sent you a bill asking for £3k?

If you owe tax they won't deduct it from your future child benefit, you will have a tax bill to pay

Self assessment isn't difficult though, and it would be worth it in your case as you will probably end up keeping at least 50% of it, more so if you pay AVCs into a pension scheme to get the tax relief on it.

It won’t come off the child benefit payments you can pay it back as a lump sum or as long as you file your return by 30 December after the end of the tax year it can be coded into your husbands paye code and he pays back though his tax

@Mudonstairs - when they introduced the 50k target we didn't complete a self assessment form and that was how much I was told I had to pay back. Think it was over 2 years worth of payments.

It was my fault as I should have completed the form. They said I could keep getting the payments and paying the difference but I put a stop to it.

Also I forgot to say. Even if you're working so don't need the child benefit NI credits for having a child under 5 (I think it's under 5... maybe 12?), you can gift them as a Specified Adult Childcare NI Credit to any family member with gaps in their record who supports you with any childcare, even occasional holiday childcare.

Oh I see. Well if we were to claim it we would definitely be doing the self assessment stuff so maybe we would be ok. I mean I’m ok with being contacted and told we have underpaid in the previous tax year. I’m more worried that 2 or more years might pass and then they hit us with a massive bill!

Oh that’s good. I didn’t know that,thanks!

@Mudonstairs - when it first started I thought they contacted people directly 😳 rather than us completing forms as we receive salaries from the companies we work for. We don't own a business.

Self assessment with HMRC. They do the calculations and tell you what you owe.

As long as he's paying into a pension you should be able to keep some of it.

I pay money back through my tax code, which means I haven't had to keep some aside. Annoyingly though this now means I have to wait a year to see the benefit of the new rate as you pay for the previous year's.

Doing a self assessment is easy peasy though. You just put in the details from your P60 and any additional pension contributions and charitable contributions. Definitely do it!

However, because my husband earns £69k we would have to pay some of it back so I’m wondering if it’s worth the hassle

If your DH has a defined contribution pension, he needs to do a tax return anyway to get his full tax relief anyway and it's literally ticking an extra box and entering a couple of extra figures, so a tiny bit of extra admin that will get you a minimum of £500 per year and keep you on the right side of HMRC.

Even if his has a defined benefit pension, doing a tax return simply due to CB is a 10 minute job once a year and they can just reclaim the money by adjusting his tax code so you don't even need to pay back a lump sum.