Should we register for child benefit when over the income threshold?.. and other £ matters

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I have looked into this before but was confused. I'm not an unintelligent person but I am not the best when it comes to understanding things like tax, pension etc etc. I was wondering if someone would have the patience to kindly break this down to me and explain it so I understand?

We are not eligible for child benefit as we earn over the threshold. My husband earns £95k and I earn around £20k. I am a company director for a small business which lost a lot of trade during Covid, and I was unable to fully build it back up, due to to having a newborn baby / toddler during that time. I also teach Art in a 6th form college part-time. So these two roles bring in about £20k.

Although our household income looks high on paper, we are in London where everything is £££ and until recently had nursery fees but thankfully all gone now. However whenever we factor in me teaching full-time it's not worth it due to the extra childcare we would need to buy for the mornings and afternoons/ evenings, versus the additional income I'd make combined with the lack of flexibility and added stress being a full-time teacher (been there), and of course not seeing our DC. (We have no family to help out so it's just us). The better option is for me to now concentrate on building the business up (now that DC at school) and make more from that whilst also having the flexibility to eg pick up child when needed and do morning drop offs etc.

Re child benefit, I never claimed it due to us being over the threshold but have just read something about it impacting my NI and pension? I make small NI contributions and normal pension contributions through my business (I get paid a small salary, not dividends as it is a social enterprise type set up), and I have a small teachers' pension but not much.

Is it in any way worth my while registering for child benefit even though it will be £0?

It all sounds a bit complicated and lots of admin and I don't need any headaches or more things to remember.

If anyone has any knowledge or advice given our situation I would be so grateful!

My wife and I both earn over the threshold, and would have to pay back child benefit, so do not claim it.

I don't understand how there could be any NI or pension implications for you from not doing so - but obviously others may be aware of something I don't know.

Your post is quite long and I'm not sure if you are asking any other questions??

I would go online and see what state pension contributions you’ve actually made. Google check my state pension contributions. You need a full year for any particular tax year to count, even one week missed doesn’t count as a full year. Then look at Martin Lewis’ site. From what I can see yes you should be claiming to get a full years contribution for your state pension. I would also look to see if there any way to get it backdated as well.

If your jobs give you the full year NI contributions you will be fine. I didn’t read that you had a couple of jobs. But you do need to check your online tax account and find your national insurance situation.

If your NI contributions are so low that they count as only partial (check in HMRC gateway for your contribution history) then yrs it is worth registering as this will upgrade you to full years on contribution for the sake of the number of years of full contributions you need in order to qualify for a pension.

It is possible to register for CB for the purposes of NI contributions but elect to not receive the money, so nothing needs to be paid back.

If a woman in your position has a husband who is controlling and financially abusive, it is entirely legal for her to claim the CB and receive the money to spend on the DC, thus requiring the higher earner to pay the money back but ensuring the children get new shoes etc. Obviously a marriage like that is doomed, but the fact that this is legally established is a lifeline for some.

The threshold is now 60k and that's after pension contributions are taken into account, so you'll be well below the threshold and you should claim it.

there are other benefits to registering, appreciate they might not apply to you - ni contributions if not working whilst kids are small, income you don’t need to ask your partner for ( very important to some), means you’re already in if close to the thresholds and they move them or you split with DP.

Downside is having to repay it as a lump in January, and DP doing a self assessment if he doesn’t already (he repays not you).

I had 3 years added when I was not working, which were as a result of being off with babies. The child benefit was the reason it was accepted. I didn’t need them in the end, though. It was useful to have them, in case I needed to stop work a lot earlier, which some do eg for health reasons.

Yes but it’s the higher earner’s salary that counts, and her DH earns well over.

Its only worth OP claiming if she needs the NI credits.

Surely its household income?

No it’s a totally unfair and shitty process which means if you both earn 59,999 you can claim it and keep it all but if one of you earns over £60k it’s a sliding scale down. One of you over £80k and nothing at all.

Ah this is exactly the kind of thing I am trying to avoid to be honest! We are really time poor and I struggle with this kind of stuff in any case. Just want to all as simple as possible. I realise life isn't always like that!

I have registered but chosen not to claim as my husband earns over the threshold. It’s come handy this year as I am job hunting after being made redundant so it qualifies me for my NI contributions as my kids are under 12. I think it’s worth doing, if you opt out of payment it’s really no faff at all.

You don’t have to pay anything back if you register but opt out of payment, it’s literally a tick box on a form.

You can opt not to receive the payment, so you get the credits but don’t need to repay anything as you never received the cash.

It’s worth doing if you’re not paying enough national insurance contributions (how do you get paid from the company? This might be a bigger issue if you take dividends not salary, for example).

Check the personal tax account on the government gateway which will show you what years you have had credit for for state pension purposes. If they are only partial / not enough then I would claim the child benefit without payment.

Just register and opt out of receiving the payment then you are covered if your NI contributions are too low.

Ah okay, that sounds much easier than having to pay it all back in January

Just claim and opt out of getting payments. That way if you have a period where you dont contribute NI for any reason you will still get credits which count towards your state pension.
This is the case until the youngest is 12.

Oh god I totally misread the DP's salary as 59 not 95 - ignore me OP!

It would only really be a benefit if you don't pay full NI based on your current employment - you could sign up and waive the payments and you'd get full NI credits. Otherwise there's really no benefit.

DH and I are both over the threshold. I am opted in and waive the payments purely for the NI credits in case I ever have a period out of work, even though it hasn't happened yet.

I always claimed for the (ridiculously slight) possibility that my husband (the high earner) might get made redundant part way through the tax year when he hadn't earnt 60k as you can't claim more than 3 months retrospectively. So if he was made redundant in say October, I wouldn't have been able to claim from April - July retrospectively. Probably wasn't worth the faff of tax returns!

Claim but opt out of payment.
Means your kids automatically get their NI numbers at age 16 too

I recommend that anyone in this situation registers purely for the NI Contributions. you will get credits while receiving CB until the youngest turns 12.

Thanks so much everyone. I've registered and ticked the box to opt out of payments which was actually very easy!

Glad you have got it sorted!

It's a good back up for NI contributions if you might not get a full years NI contributions. NI contributions are quite a binary thing you can be £10 short of a full year and that year can count for nothing.

If you have no/low source of NI contributions or unpredictable NI contributions it's absolutely worth claiming!

Glad you've got it sorted OP. I don't claim as working full time and we earn over the threshold but by registering it means children will automatically get an NI number before their 16th birthday. If you don't register for it then there will be admin when they get to the age to get that sorted. So you benefit from that too!