Child Benefit Tax Charge
Discussion
The Employer's NI contribution is based on the declared GROSS salary of the individual.
If an employer offers any sort of Salary Sacrifice scheme (whether for pensions or something else), then the Employer's NI will be calculated on the revised lower Gross Salary anmount i.e. the original Gross Salary less the sacrificed amount deducted.
It's one of the reasons why employers like salary sacrifice schemes as it helps reduce their NI contributions.
If an employer offers any sort of Salary Sacrifice scheme (whether for pensions or something else), then the Employer's NI will be calculated on the revised lower Gross Salary anmount i.e. the original Gross Salary less the sacrificed amount deducted.
It's one of the reasons why employers like salary sacrifice schemes as it helps reduce their NI contributions.
Defcon5 said:
A few people have mentioned employer contributions when talking about this - to my layman’s knowledge this has nothing to do with it?
It doesn't, people are just highlighting how much is going into their pension in total.I put over 20% in and my employer puts 9%. It's only the 20%+ that effect the CB though.
Eric Mc said:
The Employer's NI contribution is based on the declared GROSS salary of the individual.
If an employer offers any sort of Salary Sacrifice scheme (whether for pensions or something else), then the Employer's NI will be calculated on the revised lower Gross Salary anmount i.e. the original Gross Salary less the sacrificed amount deducted.
It's one of the reasons why employers like salary sacrifice schemes as it helps reduce their NI contributions.
I once worked for a company that paid the employers NI into the pension too. 13.8% on top of whatever I sacrificed.If an employer offers any sort of Salary Sacrifice scheme (whether for pensions or something else), then the Employer's NI will be calculated on the revised lower Gross Salary anmount i.e. the original Gross Salary less the sacrificed amount deducted.
It's one of the reasons why employers like salary sacrifice schemes as it helps reduce their NI contributions.
I was pulling my hair out when I found myself being taxed on a "special K" code. When HR told me about this it sealed the deal for me and I decided to half my salary.
This is probably a stupid question but I cannot find a straight answer.
I need to dump 6k into my vanguard pension in the next few weeks.
When I make the contribution vanguard add 20pc to the sum I contribute by way of tax relief and my sum plus the 20pc goes into the pension.I then do my tax return and claim back the additional 20pc.
My question is when I do the tax return when it says how much have you paid into your pension do I include the 20pc top up vanguard have added when I paid it in? They're obviously giving me back the tax I've paid on it, I understand that, and it's gone into the pension.
So I assume that it counts towards lowering my net adjusted income, which is the aim?
I need to dump 6k into my vanguard pension in the next few weeks.
When I make the contribution vanguard add 20pc to the sum I contribute by way of tax relief and my sum plus the 20pc goes into the pension.I then do my tax return and claim back the additional 20pc.
My question is when I do the tax return when it says how much have you paid into your pension do I include the 20pc top up vanguard have added when I paid it in? They're obviously giving me back the tax I've paid on it, I understand that, and it's gone into the pension.
So I assume that it counts towards lowering my net adjusted income, which is the aim?
princeperch said:
This is probably a stupid question but I cannot find a straight answer.
I need to dump 6k into my vanguard pension in the next few weeks.
When I make the contribution vanguard add 20pc to the sum I contribute by way of tax relief and my sum plus the 20pc goes into the pension.I then do my tax return and claim back the additional 20pc.
My question is when I do the tax return when it says how much have you paid into your pension do I include the 20pc top up vanguard have added when I paid it in? They're obviously giving me back the tax I've paid on it, I understand that, and it's gone into the pension.
So I assume that it counts towards lowering my net adjusted income, which is the aim?
This may be an equally stupid answer but would you not just enter your actual contribution - the vanguard contribution is not coming from your salary per se. I need to dump 6k into my vanguard pension in the next few weeks.
When I make the contribution vanguard add 20pc to the sum I contribute by way of tax relief and my sum plus the 20pc goes into the pension.I then do my tax return and claim back the additional 20pc.
My question is when I do the tax return when it says how much have you paid into your pension do I include the 20pc top up vanguard have added when I paid it in? They're obviously giving me back the tax I've paid on it, I understand that, and it's gone into the pension.
So I assume that it counts towards lowering my net adjusted income, which is the aim?
princeperch said:
This is probably a stupid question but I cannot find a straight answer.
I need to dump 6k into my vanguard pension in the next few weeks.
When I make the contribution vanguard add 20pc to the sum I contribute by way of tax relief and my sum plus the 20pc goes into the pension.I then do my tax return and claim back the additional 20pc.
My question is when I do the tax return when it says how much have you paid into your pension do I include the 20pc top up vanguard have added when I paid it in? They're obviously giving me back the tax I've paid on it, I understand that, and it's gone into the pension.
So I assume that it counts towards lowering my net adjusted income, which is the aim?
Just looked at mine for this year and I put in the whole amount. My lump sum and the extra 20%.I need to dump 6k into my vanguard pension in the next few weeks.
When I make the contribution vanguard add 20pc to the sum I contribute by way of tax relief and my sum plus the 20pc goes into the pension.I then do my tax return and claim back the additional 20pc.
My question is when I do the tax return when it says how much have you paid into your pension do I include the 20pc top up vanguard have added when I paid it in? They're obviously giving me back the tax I've paid on it, I understand that, and it's gone into the pension.
So I assume that it counts towards lowering my net adjusted income, which is the aim?
In the Tax Relief section, box 1 is for payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider.
It says "Enter the payments and basic rate tax"
Register1 said:
Thanks Eric and Last poster.
Wife earns £57,000
I am a "stay at home dad" not working, just £11,000 state pension
Is it she needs to dispose of the £7,000 into a pension, in order for me to claim the full CB.?
Yes. But worded slightly differently - you are free to claim the CB, but it is your wife that will pay a "charge" equivalent to 70% of the child benefit that you are in receipt of.Wife earns £57,000
I am a "stay at home dad" not working, just £11,000 state pension
Is it she needs to dispose of the £7,000 into a pension, in order for me to claim the full CB.?
Edited by WhiskyDisco on Tuesday 27th February 22:41
Hondashark said:
Just looked at mine for this year and I put in the whole amount. My lump sum and the extra 20%.
In the Tax Relief section, box 1 is for payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider.
It says "Enter the payments and basic rate tax"
Thank you. So have I understood you correctly, you have relied on the extra 20pc tax relief added to the pension pot to bring your net adjusted down right? Not just the sum you added, the tax relief too yes? In the Tax Relief section, box 1 is for payments to registered pension schemes where basic rate tax relief will be claimed by your pension provider.
It says "Enter the payments and basic rate tax"
Register1 said:
Is it if one parent earns more than £50.000 gross, or is it £50,000 net?
I dont quite understand it.
Or is it something else?
HMRC refers to it as ‘adjusted net income’ , but it’s what anyone else would call gross.I dont quite understand it.
Or is it something else?
It’s taxable pay, which is gross less deductions for pension, salary sacrifice etc, but before tax.
Sheepshanks said:
Register1 said:
Is it if one parent earns more than £50.000 gross, or is it £50,000 net?
I dont quite understand it.
Or is it something else?
HMRC refers to it as ‘adjusted net income’ , but it’s what anyone else would call gross.I dont quite understand it.
Or is it something else?
It’s taxable pay, which is gross less deductions for pension, salary sacrifice etc, but before tax.
princeperch said:
Thank you. So have I understood you correctly, you have relied on the extra 20pc tax relief added to the pension pot to bring your net adjusted down right? Not just the sum you added, the tax relief too yes?
Yes, my payslip last March said my total would be £51130, so I put a lump some of £910 into my pension before the end of the month. They put the tax relief of £227.50 in giving me a total of £1137.50.I then wrote to HMRC to claim the extra tax back but after 6 months of no response I just did a self assessment and they said I was owed £168.40, which I then had to chase for them to actually send it to me. (20% is never 20% when they owe you it. Possibly down to the 40% bracket being just over £50k).
Only problem with the lump sum method is you lose out on the 4% NI so I try and get it all under salary sacrifice which is pretty hard if your income fluctuates.
Hard to imagine them not doing something about HICBC. It's universally hated and so many are dragged into self assessment by it now.
£50k doesn't feel like the aspirational target it once did. Now it's just the point where you bend over and hand the govt the lube.
I'm hoping the tax bands change to help boost productivity, but i really don't think direct tax or NI cuts are what we need right now.
I'm ready to be disappointed though.
£50k doesn't feel like the aspirational target it once did. Now it's just the point where you bend over and hand the govt the lube.
I'm hoping the tax bands change to help boost productivity, but i really don't think direct tax or NI cuts are what we need right now.
I'm ready to be disappointed though.
princeperch said:
I don't know hence the question!
Having just looked at my wife’s SA return I can see that for her SIPP the whole was entered (£3,600 as opposed to the £2,880 actually contributed ) so assuming the same methodology , ignore my initial reply and go with Sheepshanks who appears spot on. Gassing Station | Finance | Top of Page | What's New | My Stuff