Child benefit if over threshold
Discussion
Had child earlier in the year but we never bothered claiming the child benefit as were above the threshold so meant we could claim it but had to pay it all back so got no benefit from it, fine I thought we won't bother claiming it as I don't need the extra admin. I've seen a few article knows though that say even though its an admin headache I should be claiming it as then it helps build up the NI or something for the child. I will start claiming it but what's the best way to do it to minimise the admin and declaring it etc
Edited by PostHeads123 on Tuesday 22 November 17:08
You can claim it and then pay it back through self assessment.
Rebecca Bennyworth (who is a well known tax and NI lecturer) has always advocated that you go ahead and receive the benefit and then pay it back if necessary through self assessment.
The problem is that people have to predict in advance that their income is GOING to be over the two thresholds £40,000 and £50,000). If someone loses their job during the year or some other factor comes into play that reduces their income they will find they may have stopped a benefit they would have been entitled to. And you can't make back claims.
Rebecca Bennyworth (who is a well known tax and NI lecturer) has always advocated that you go ahead and receive the benefit and then pay it back if necessary through self assessment.
The problem is that people have to predict in advance that their income is GOING to be over the two thresholds £40,000 and £50,000). If someone loses their job during the year or some other factor comes into play that reduces their income they will find they may have stopped a benefit they would have been entitled to. And you can't make back claims.
Although I am very worried about the Making Tax Digital system coming in after 6 April 2018, one of its few plus points is that it might make it easier for tax payers to notify HMRC about significant fluctuations in their income on a real time basis.
However, to make this work, taxpayers and child benefit claimants are going to adopt a new "hands on" and much more proactive approach to their tax affairs - something which they have never had to do before.
However, to make this work, taxpayers and child benefit claimants are going to adopt a new "hands on" and much more proactive approach to their tax affairs - something which they have never had to do before.
MrJuice said:
I thought the thresholds were 50k at which point you get a sliding scale of less and less and 60k at which point you get none?
Ditto.To the OP - your other half gets full NI credits for the duration of the time she claims CB. This has an impact on stay-at-home mums. It means they accrue entitlement to State pension.
Countdown said:
MrJuice said:
I thought the thresholds were 50k at which point you get a sliding scale of less and less and 60k at which point you get none?
Ditto.To the OP - your other half gets full NI credits for the duration of the time she claims CB. This has an impact on stay-at-home mums. It means they accrue entitlement to State pension.
As above, you need to "claim" it so that you wife gets her full NI entitlement even if she's not working or part time. If you're over the upper threshold (as I am this year) you can elect not to take the payments even though you are still claiming the benefit. It's a stupid system if you ask me anyway. Unfortunately I couldn't salary sacrifice anymore money to keep me in a position where we'd still get it.
If you're between the £50k and £60k threshold then continue to take the payments, they'll take back the bit that they've overpaid you through your tax but you'll need to fill out a return each year. Easy enough to do online. If you ever end up in a situation where you're getting paid less again you can resume the payments.
Pisses me off really, the one bit of return I might have been entitled to from the large amounts of tax and NI I've paid over the years has been taken away from me. It's crazy that you can have a couple earning £50k each so a combined income of £100k and they can claim the full benefit yet my wife doesn't work so our household income is much less than this but no benefit.
If you're between the £50k and £60k threshold then continue to take the payments, they'll take back the bit that they've overpaid you through your tax but you'll need to fill out a return each year. Easy enough to do online. If you ever end up in a situation where you're getting paid less again you can resume the payments.
Pisses me off really, the one bit of return I might have been entitled to from the large amounts of tax and NI I've paid over the years has been taken away from me. It's crazy that you can have a couple earning £50k each so a combined income of £100k and they can claim the full benefit yet my wife doesn't work so our household income is much less than this but no benefit.
C0ffin D0dger said:
Pisses me off really, the one bit of return I might have been entitled to from the large amounts of tax and NI I've paid over the years has been taken away from me. It's crazy that you can have a couple earning £50k each so a combined income of £100k and they can claim the full benefit yet my wife doesn't work so our household income is much less than this but no benefit.
Agree 100%. Very unfair. As a PAYE earner and small business owner with a wife who doesn't 'work', I fully intend to stay below the £50k threshold by reducing hours as I get to that level. I'm a new doctor so 50k is some distance away but that's my intention. And will keep my wife's salary from my business below 50k as wellThanks for replies I will start claiming it.
Also agree its very unfair the whole Child Benefit is done I thought it some kind of typo when I first read it. I also noticed that for things like child care vouchers also if you were already in the scheme and higher rate payer you could claim £243 and still can, now if you join the scheme as higher rate is £126 or something but its less.
Also agree its very unfair the whole Child Benefit is done I thought it some kind of typo when I first read it. I also noticed that for things like child care vouchers also if you were already in the scheme and higher rate payer you could claim £243 and still can, now if you join the scheme as higher rate is £126 or something but its less.
PostHeads123 said:
Thanks for replies I will start claiming it.
Also agree its very unfair the whole Child Benefit is done I thought it some kind of typo when I first read it. I also noticed that for things like child care vouchers also if you were already in the scheme and higher rate payer you could claim £243 and still can, now if you join the scheme as higher rate is £126 or something but its less.
If that's true it must have changed more than 3.5 years ago, I have been buying vouchers since my first son was born and its always been capped at £124 per month for higher rate tax payers and £243 (i think) for lower rate.Also agree its very unfair the whole Child Benefit is done I thought it some kind of typo when I first read it. I also noticed that for things like child care vouchers also if you were already in the scheme and higher rate payer you could claim £243 and still can, now if you join the scheme as higher rate is £126 or something but its less.
I also don't claim them as im above the threshold and although the wife is well below threshold she still contributes to NI via her PAYE.
CrouchingWayne said:
I think you can zero rate this - the wife did the admin to register but don't get the payment.
That's what we do, I am not eligible for any CB so we stopped the payments but wife still got NI "stamp" as she was not in employment (careful to avoid "not working" !!!).Did wonder if I might be better of with the interest free loan then pay it back but I dropped out of self assessment last year. Probably going back in though voluntarily.
C0ffin D0dger said:
As above, you need to "claim" it so that you wife gets her full NI entitlement even if she's not working or part time. If you're over the upper threshold (as I am this year) you can elect not to take the payments even though you are still claiming the benefit. It's a stupid system if you ask me anyway. Unfortunately I couldn't salary sacrifice anymore money to keep me in a position where we'd still get it.
If you're between the £50k and £60k threshold then continue to take the payments, they'll take back the bit that they've overpaid you through your tax but you'll need to fill out a return each year. Easy enough to do online. If you ever end up in a situation where you're getting paid less again you can resume the payments.
Pisses me off really, the one bit of return I might have been entitled to from the large amounts of tax and NI I've paid over the years has been taken away from me. It's crazy that you can have a couple earning £50k each so a combined income of £100k and they can claim the full benefit yet my wife doesn't work so our household income is much less than this but no benefit.
Agreed also. My wife works minimum wage for about 12 hours per week, I earn mid £50k so we don't get full benefit whilst some friends earn about £90k PA and get full benefit....If you're between the £50k and £60k threshold then continue to take the payments, they'll take back the bit that they've overpaid you through your tax but you'll need to fill out a return each year. Easy enough to do online. If you ever end up in a situation where you're getting paid less again you can resume the payments.
Pisses me off really, the one bit of return I might have been entitled to from the large amounts of tax and NI I've paid over the years has been taken away from me. It's crazy that you can have a couple earning £50k each so a combined income of £100k and they can claim the full benefit yet my wife doesn't work so our household income is much less than this but no benefit.
I have not done the SA yet for last years earnings (I used to earn much more, so did not claim benefits). What information is required? Will my P60 give all the information I require to complete the SA? I thought my pension payments would offset some of the amount I would need to payback too?
TIA
Mike
We claim CB to ensure the wife's NI contributions.
We end up paying it all back but there are three ways of doing it.
A: Claim full benefits, stick it in the bank and when you do your tax return you get a big bill & pay it back.
2: Claim full benefits then go online with HMRC and amend your tax code to include the extra cash.
C: Claim full benefits then go online with the child benefits people & 'opt out' of payments, according to the online chat (not sexy) I had with them the other day they'll stop payments but keep your file running until your kids turn 12 so your wife will still qualify for NI credits.
This is probably the easiest option as anything involving income tax is a massive pain in the arse.
Alternatively there's option D:
Forget to tell your accountant you're getting CB, spend it all and get a big bloody bill at the end of the tax year.
We end up paying it all back but there are three ways of doing it.
A: Claim full benefits, stick it in the bank and when you do your tax return you get a big bill & pay it back.
2: Claim full benefits then go online with HMRC and amend your tax code to include the extra cash.
C: Claim full benefits then go online with the child benefits people & 'opt out' of payments, according to the online chat (not sexy) I had with them the other day they'll stop payments but keep your file running until your kids turn 12 so your wife will still qualify for NI credits.
This is probably the easiest option as anything involving income tax is a massive pain in the arse.
Alternatively there's option D:
Forget to tell your accountant you're getting CB, spend it all and get a big bloody bill at the end of the tax year.
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