Child Benefit Tax Charge

[Eric Mc]

KTF said:

Ok, if I were to stop it from tomorrow then I would have to fill it in again next year to pay the charge for the part of this year 23/24 that I have already been receiving it.

Then call them up after April 2024 and see what they say about de-registering me.

Exactly.

[KTF]

duckson said:

No you ADD on ANY non-ISA interest you have accrued in that tax year to your total earnings.

Ah yes, as that is also classed as income. I thought that was also automatically reported by the banks, etc as well or is that also not the case?

[Pit Pony]

Eric Mc said:

Assessing household income for benefits is one thing, assessing household income for tax purposes is something different. The Child Benefit clawback system blurs that distinction.

Just because they are different, should they be ?

[duckson]

KTF said:

duckson said:

No you ADD on ANY non-ISA interest you have accrued in that tax year to your total earnings.

Ah yes, as that is also classed as income. I thought that was also automatically reported by the banks, etc as well or is that also not the case?

It should be but I assume (having not done one yet) you can input it on the SA.

[alangla]

duckson said:

KTF said:

duckson said:

No you ADD on ANY non-ISA interest you have accrued in that tax year to your total earnings.

Ah yes, as that is also classed as income. I thought that was also automatically reported by the banks, etc as well or is that also not the case?

It should be but I assume (having not done one yet) you can input it on the SA.

There’s a side-sheet on the self-assessment web form that allows you to enter the interest figures from up to 10 accounts and then inserts the total into the main form. The most annoying bit of this is that some institutions (Well known building society advertised by Dominic West!) don’t make it easy to get interest certificates for closed accounts. Generally your online bank will have a link to see an interest certificate for your tax return.

[Eric Mc]

Pit Pony said:

Eric Mc said:

Assessing household income for benefits is one thing, assessing household income for tax purposes is something different. The Child Benefit clawback system blurs that distinction.

Just because they are different, should they be ?

A lot of government systems are "legacy systems". They date back over 70 years in the main (the end of World War 2 was a key moment) and have evolved over the decades with different rules, interpretations of rules, government departments etc. Trying to merge these systems together is very, very difficult.

Even systems that are, in theory, managed by the same organisation e.g. HMRC (VAT, NI, Income Tax) have clashes and differences as they all evolved differently with different aims and objectives. Dragging the DWP into an HMRC administered set-up causes all sorts of problems.

[Chicken Chaser]

I'm also being chased by HMRC for last year's payments. I wasn't sure how far I'd drop I to the higher rate as it's the first time I have done. Turns out I'll owe 60% back for the 2 kids' allowances. Projection for this tax year looks like I'll have to give it all back. At the minute I've not cancelled it. I could do AVC and try and stay under the threshold but it's difficult to do when I have the ability to earn more just by putting in the hours.
Obviously last year's has gone as I can't retrospectively put money into my pension for last tax year but is it best just to wait until the end of the year, make the calculation and then ask payroll to drop in a lump sum?

Really pisses me off that the more you push yourself into better roles, the more the govt penalises you for doing so. Tax is an unfair system. I have friends who both earn £48k a year with 2 kids and can claim this, yet as a household we earn at least £10k less as my wife works part time and I'm having to repay it whilst paying extra tax as well!

[Eric Mc]

A progressive tax system in itself is not unfair but the method by which Child Tax Credit is restricted is grossly unfair - as has been highlighted in this thread.

[Downward]

The Rotrex Kid said:

pacenotes said:

I expect the threshold to go up on Wednesday.

They need the middle voters next year.

You'd think it would get more people onside than cutting bloody inheritance tax!

It’s going to take a lot more to vote Tory but that’s a different argument !

But yes as someone whose child is maybe going to Uni next year the way they calculate the grant is a bit unfair with there being no difference in earning £10k more per annum it seems.

With the threshold there’s no way he could afford to go away to uni given the £9k per annum fee and the cost to rent and live.

[Chicken Chaser]

I've just been sent a new tax code to repay what I owe. I thought they would have just asked for the money in a lump sum.

[alangla]

Chicken Chaser said:

I've just been sent a new tax code to repay what I owe. I thought they would have just asked for the money in a lump sum.

I believe you can ask HMRC to consider alternative payment methods like a lump sum if you want. I got a tax code change as well, tax free allowance halved and nearly £200 off my monthly net pay. Complete kick in the stones.

[KTF]

I also had a new tax code sent through after I did the self assessment last week and it said I had to pay it.

Now I am confused, do I still need to pay it or will be be collected by the tax code change? If it still needs to be paid, is there a balance due section on the HMRC website anywhere?

[Eric Mc]

Chicken Chaser said:

I've just been sent a new tax code to repay what I owe. I thought they would have just asked for the money in a lump sum.

You can ask that they handle it that way if you wish.

[The Rotrex Kid]

KTF said:

I also had a new tax code sent through after I did the self assessment last week and it said I had to pay it.

Now I am confused, do I still need to pay it or will be be collected by the tax code change? If it still needs to be paid, is there a balance due section on the HMRC website anywhere?

If you’ve had a tax code change then they will take the payment via that. I think if you log in to your personal tax account it will show you? Otherwise they will update again at the end of next year.

I just let them take it from my tax code, just makes it easier IMO

[KTF]

If I look under the self assessment section it says:

Your balance
No tax is due at the moment

I dont know what it said before the tax code change but I will assume I dont need to pay anything now. It really isnt that clear given how you will get fined if you get it wrong.

[Eric Mc]

KTF said:

It really isnt that clear given how you will get fined if you get it wrong.

HMRC likes it that way.

[duckson]

The company I work for has recently started a EV/hybrid salary sacrifice car scheme so using this and increased pension contributions I should be able to keep it under the £50k from next tax year (this years I’m going to be over but need/want the cash!).

[The Rotrex Kid]

Well, no reprieve today then!

A 2% reduction in NI, so you get to keep 2% more of your money, but you’ll be taxed on that and there’s 2% more towards your higher earner child benefit payback

[Beethree]

The Rotrex Kid said:

Well, no reprieve today then!

A 2% reduction in NI, so you get to keep 2% more of your money, but you’ll be taxed on that and there’s 2% more towards your higher earner child benefit payback

Haha yup, pretty meaningless for most people

[okgo]

£750 a person net for a higher earners isn’t it?