Child benefit question
Discussion
I'm PAYE and have just received my P60 for the last financial year and due to a couple of one off bonuses I've managed to earn over £50k. So this means I now need to repay some of the child benefits paid to my wife. I've looked at the website and it talks about taking it back through my tax code. Is this done automatically or do I need to contact them? Do they get a copy of the info on my P60?
You need to let them know by completing a tax return. The link below should help.
http://www.which.co.uk/money/tax/guides/child-bene...
You could mitigate this by paying earnings over £50k into your pension?
http://www.which.co.uk/money/tax/guides/child-bene...
You could mitigate this by paying earnings over £50k into your pension?
Register to complete a Self Assessment tax return for 2014/15. This means HMRC will ask you to pay back to the (as a tax payment) the overpaid element of the Child Benefit. You will need to pay this by 31 January 2016.
In the meantime, keep receiving the normal Child Benefit for 2015/16. By 5 April 2016 you will know for sure whether you received more than £50,000 in 2015/16.
Try to avoid having your Tax Code amended as this will mean you will never understand what tax you are paying each year ever again.
In the meantime, keep receiving the normal Child Benefit for 2015/16. By 5 April 2016 you will know for sure whether you received more than £50,000 in 2015/16.
Try to avoid having your Tax Code amended as this will mean you will never understand what tax you are paying each year ever again.
Im in exactly the same situation. Normal salary is below a bit below 50K which means the other half can claim the full benefit for our two children. She doesn't work. However I'm also PAYE, never filled in a tax return, never been asked to fill in a tax return and my P60 now says I earned over 60K last year with bonus and my overtime/on call.
I understand that for every £100 you earn between 50K and 60K you have to pay back 1% so It means technically I owe the HMRC the full amount we received in child benefit.
Im not married to my partner. Living in sin!
So I have the same question I guess, at what point will they catch up with me and tell me to pay the money back. Am I supposed to request I complete a tax return? Surely there are plenty in our/my situation?
I don't want to stop claiming child benefit because I don't know from one year to the next if Ill ever go over 50K. Plus it goes straight in to the Mrs bank account, is she stops getting that she will be after me for even more money!
I'm not trying to get out of this, I had several years after a company car where my tax code was wrong and I had no idea what was going on. I only just managed to get back to the 1000L code so I need to sort this out ASAP.
I pay 5% into my pension (employer pays 10%). I also pay AVCs, is it possible to increase the AVCs so my taxable salary is reduced? Anyone know the math to work that out please?
Given that the name of the person claiming the benefits is different than mine will that slow the HMRC down or will they get me eventually!
Thanks.
I understand that for every £100 you earn between 50K and 60K you have to pay back 1% so It means technically I owe the HMRC the full amount we received in child benefit.
Im not married to my partner. Living in sin!
So I have the same question I guess, at what point will they catch up with me and tell me to pay the money back. Am I supposed to request I complete a tax return? Surely there are plenty in our/my situation?
I don't want to stop claiming child benefit because I don't know from one year to the next if Ill ever go over 50K. Plus it goes straight in to the Mrs bank account, is she stops getting that she will be after me for even more money!
I'm not trying to get out of this, I had several years after a company car where my tax code was wrong and I had no idea what was going on. I only just managed to get back to the 1000L code so I need to sort this out ASAP.
I pay 5% into my pension (employer pays 10%). I also pay AVCs, is it possible to increase the AVCs so my taxable salary is reduced? Anyone know the math to work that out please?
Given that the name of the person claiming the benefits is different than mine will that slow the HMRC down or will they get me eventually!
Thanks.
Edited by oldaudi on Thursday 23 April 09:19
You are pretty much obliged by law to notify HMRC that you need to pay this back. Waiting for them to catch up with you is not really an option. If you take the latter approach it could work out very, very expensive for you and you could end up paying back to HMRC well more than double the Child Benefit amount you incorrectly received.
To correct the situation, the solution is to contact HMRC in order to register for self assessment for 2014/15.
If you know that your income is permanently going to be in excess of £60,000, you should arrange to have the Child Benefit stopped for now and future years.
The problem is predicting the future. If your income drops below £60,000 at any point, you will become eligible again to receive Child Benefit and you will need to contact HMRC to reinstate it.
To correct the situation, the solution is to contact HMRC in order to register for self assessment for 2014/15.
If you know that your income is permanently going to be in excess of £60,000, you should arrange to have the Child Benefit stopped for now and future years.
The problem is predicting the future. If your income drops below £60,000 at any point, you will become eligible again to receive Child Benefit and you will need to contact HMRC to reinstate it.
You should sort this asap.
My experience - earning over £60k and having a lot of taxable benefits made a huge mess of my tax code and witht he amount of changes during a year 4 in 13/14 I ended up owing the taxman over £5000 which I only knew about when I completed the tax return. On top of this they wanted half of the amount as payment on account for next year, so £7.5k I had to pay in a month.
Its only just been sorted out having made that huge payment and being on a negative K tax code for 9 months.
Sort it ASAP and opt out of child benefit is my advice.
My experience - earning over £60k and having a lot of taxable benefits made a huge mess of my tax code and witht he amount of changes during a year 4 in 13/14 I ended up owing the taxman over £5000 which I only knew about when I completed the tax return. On top of this they wanted half of the amount as payment on account for next year, so £7.5k I had to pay in a month.
Its only just been sorted out having made that huge payment and being on a negative K tax code for 9 months.
Sort it ASAP and opt out of child benefit is my advice.
Eric Mc said:
You are pretty much obliged by law to notify HMRC that you need to pay this back. Waiting for them to catch up with you is not really an option. If you take the latter approach it could work out very, very expensive for you and you could end up paying back to HMRC well more than double the Child Benefit amount you incorrectly received.
To correct the situation, the solution is to contact HMRC in order to register for self assessment for 2014/15.
If you know that your income is permanently going to be in excess of £60,000, you should arrange to have the Child Benefit stopped for now and future years.
The problem is predicting the future. If your income drops below £60,000 at any point, you will become eligible again to receive Child Benefit and you will need to contact HMRC to reinstate it.
I going to ring them this morning.To correct the situation, the solution is to contact HMRC in order to register for self assessment for 2014/15.
If you know that your income is permanently going to be in excess of £60,000, you should arrange to have the Child Benefit stopped for now and future years.
The problem is predicting the future. If your income drops below £60,000 at any point, you will become eligible again to receive Child Benefit and you will need to contact HMRC to reinstate it.
I know that my salary won't exceed 50k this year although it may well the following year but not by a large margin.
My opinion is that anybody who is a higher rate taxpayer - even if mainly taxed under PAYE - should do well to consider registering for Self Assessment (whether receiving Child Benefit or not).
Self Assessment puts the taxpayer in charge of their own tax affairs and helps them understand what is going on. More importantly, it allows them to carry out an annual "health check" on their tax affairs and to spot any errors which may be ongoing with their tax affairs. Trusting HMRC and your employer/pension provider etc to handle PAYE correctly is extremely naive as they very, very often do not.
Also, higher rate taxpayers often have additional income (such as interest received or dividends) which can only be taxed properly under Self Assessment and they may have extra tax relief claims they are entitled to (pension contributions, charitable donations etc) that they will miss out on if they don't make the relevant claims.
When the Chancellor announced in the budget that Self Assessment was being abolished for 12 million taxpayers a shudder went down my spine. Not because I am going to lose any fees (I won't) but the fact that the solution will be that HMRC and employers will take over complete responsibility for providing and assessing a person's tax liability - but that the taxpayer will be held responsible if it all goes wrong.
HMRC's track record on pulling together an individual's tax details so that THEY can work out the individual's correct tax is pretty woeful.
Self Assessment puts the taxpayer in charge of their own tax affairs and helps them understand what is going on. More importantly, it allows them to carry out an annual "health check" on their tax affairs and to spot any errors which may be ongoing with their tax affairs. Trusting HMRC and your employer/pension provider etc to handle PAYE correctly is extremely naive as they very, very often do not.
Also, higher rate taxpayers often have additional income (such as interest received or dividends) which can only be taxed properly under Self Assessment and they may have extra tax relief claims they are entitled to (pension contributions, charitable donations etc) that they will miss out on if they don't make the relevant claims.
When the Chancellor announced in the budget that Self Assessment was being abolished for 12 million taxpayers a shudder went down my spine. Not because I am going to lose any fees (I won't) but the fact that the solution will be that HMRC and employers will take over complete responsibility for providing and assessing a person's tax liability - but that the taxpayer will be held responsible if it all goes wrong.
HMRC's track record on pulling together an individual's tax details so that THEY can work out the individual's correct tax is pretty woeful.
Devil2575 said:
I going to ring them this morning.
I know that my salary won't exceed 50k this year although it may well the following year but not by a large margin.
But what about bonuses? Are you sure you won't be getting any?I know that my salary won't exceed 50k this year although it may well the following year but not by a large margin.
What happens if you get a surprise bonus?
Also, do you have any other taxable income that could pitch you over the £50,000?
Right just phoned them:
My basic salary is below 50K which means as a family we are allowed to claim Child Benefit. As this is not changing the lady advised me to keep claiming this which I will.
For the tax year 14-15 my total taxable income was 61K. For every 1% you earn over £50K you have to pay back £100. So this means I have to pay back the full amount.
I have to complete a tax return self assessment form by the end of December 2015 and the money will be recovered from my tax code 2016-2017
If my salary goes over 50K for 2015-2016 I shall complete another tax return so they can claim it back 2016-2017. The easiest answer here is to stop claiming child benefit but I have no idea what my total take home is one year to the next
So as advised I would get it sorted ASAP otherwise you could end up being a few years out and they'll claim the lot in once go.
My basic salary is below 50K which means as a family we are allowed to claim Child Benefit. As this is not changing the lady advised me to keep claiming this which I will.
For the tax year 14-15 my total taxable income was 61K. For every 1% you earn over £50K you have to pay back £100. So this means I have to pay back the full amount.
I have to complete a tax return self assessment form by the end of December 2015 and the money will be recovered from my tax code 2016-2017
If my salary goes over 50K for 2015-2016 I shall complete another tax return so they can claim it back 2016-2017. The easiest answer here is to stop claiming child benefit but I have no idea what my total take home is one year to the next
So as advised I would get it sorted ASAP otherwise you could end up being a few years out and they'll claim the lot in once go.
Edited by oldaudi on Thursday 23 April 10:04
Edited by oldaudi on Thursday 23 April 10:06
She gave you some misleading information.
The deadline for submitting the 2014/15 Self Assessment tax return is 31 January 2016 (not 31 December 2015)
There is no obligation to pay back the Child Benefit through an adjustment to your tax code. You can (and in my opinion, should), pay directly and not allow them to mess with your tax code.
If you go down the tax code adjustment route and you submit the tax return from 1 November 2015, the tax code that will be amnended will be the tax code for tax year 2016/17. This means that from 6 April 2016 to 5 April 2017 you will be paying back a liability in respect of tax year 2014/15.
YHM
The deadline for submitting the 2014/15 Self Assessment tax return is 31 January 2016 (not 31 December 2015)
There is no obligation to pay back the Child Benefit through an adjustment to your tax code. You can (and in my opinion, should), pay directly and not allow them to mess with your tax code.
If you go down the tax code adjustment route and you submit the tax return from 1 November 2015, the tax code that will be amnended will be the tax code for tax year 2016/17. This means that from 6 April 2016 to 5 April 2017 you will be paying back a liability in respect of tax year 2014/15.
YHM
My hunch is that you may have years where you will be entitled to all Child Benefit, years where you will be entitled to some Child Benefit and years when you will be entitled to no Child Benefit.
This means there will be years where you can keep it, years when you need to pay some back and years when you need to pay it all back.
I am pretty sure these regulations are here to stay. I don't see Labour rescinding any of this if they win in a couple of weeks. The topic is notable by its complete absence from any of the election debates and discussions.
I wonder how often the thresholds will change. As ever, I expect that they will remain at £50,0000 and £60,000 for a long time and over time more and more people will find themselves having to cope with this as their salaries and other taxable income increases over time.
This means there will be years where you can keep it, years when you need to pay some back and years when you need to pay it all back.
I am pretty sure these regulations are here to stay. I don't see Labour rescinding any of this if they win in a couple of weeks. The topic is notable by its complete absence from any of the election debates and discussions.
I wonder how often the thresholds will change. As ever, I expect that they will remain at £50,0000 and £60,000 for a long time and over time more and more people will find themselves having to cope with this as their salaries and other taxable income increases over time.
Eric Mc said:
Devil2575 said:
I going to ring them this morning.
I know that my salary won't exceed 50k this year although it may well the following year but not by a large margin.
But what about bonuses? Are you sure you won't be getting any?I know that my salary won't exceed 50k this year although it may well the following year but not by a large margin.
What happens if you get a surprise bonus?
Also, do you have any other taxable income that could pitch you over the £50,000?
Edited by Devil2575 on Thursday 23 April 11:58
Thanks for the Email Eric. Im unable to call at the moment.
My plan is to continue to claim it and file a tax return and pay what I owe in once go. Rather than messing about with my tax code.
Whilst I stay below 50K Im entitled to the full amount. If I float between 50 and 60 Ill claim all of it and pay back. That's easier I think.
Im going to investigate if I can have my bonus paid into my pension or if I make more AVC that will reduce my taxable salary
Thanks for the guidance
My plan is to continue to claim it and file a tax return and pay what I owe in once go. Rather than messing about with my tax code.
Whilst I stay below 50K Im entitled to the full amount. If I float between 50 and 60 Ill claim all of it and pay back. That's easier I think.
Im going to investigate if I can have my bonus paid into my pension or if I make more AVC that will reduce my taxable salary
Thanks for the guidance
Paying additional pension contributions is an effective way of reducing your taxable income below the various thresholds so it is a very worthwhile strategy to investigate.
Even donations to charities will help in reducing your taxable income so make sure you keep a record of all gift aided donations you make each tax year. That includes entrances to some museums and properties such as NHS houses or RHS gardens - or sponsoring mates on cycle rides etc.
Even donations to charities will help in reducing your taxable income so make sure you keep a record of all gift aided donations you make each tax year. That includes entrances to some museums and properties such as NHS houses or RHS gardens - or sponsoring mates on cycle rides etc.
oldaudi said:
Right just phoned them:
My basic salary is below 50K which means as a family we are allowed to claim Child Benefit. As this is not changing the lady advised me to keep claiming this which I will.
EVERYBODY is allowed to claim child benefit who has children. Whether you get to keep it or not is the relevant part.My basic salary is below 50K which means as a family we are allowed to claim Child Benefit. As this is not changing the lady advised me to keep claiming this which I will.
Unless you know your salary (after pension, childcare, gift aid, cycle to work etc) will never dip below £60k then there is no need at all to stop receiving it.
And even if you always have to pay it back, it's an interest free loan from the government!
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