Child Benefit tax return

[bmwmike]

BenjiS said:

mikyccity said:

theboss said:

When you claim CB you can elect to have your eligibility recorded but not to actually receive the money - therefore you get the state pension / NI credit but without the hassle of receiving the payments then paying them back via the tax charge later.

This is interesting.

This is what we’ve always done since the eligibility rules changed. There’s an option in the website for you to select it.

Checking my wife’s NI account shows she has full contributions despite not working since we had kids. And I’ve never needed to do a tax return.

Same here, best approach IMO. Can't be doing with the hassle of sending back a couple of k each year. Did to with the idea of dropping the taxable pay to become eligible again that boat has sailed for now.

[mfmman]

Each to their own but I would (and do) take the payments

If you suddenly found yourself out of work, or even better made a strategic timing of resigning from your role to take time out/go self employed or similar then it might be possible to retain the full years worth of the benefit. If you only re-started claiming it from a certain point then AFAIK it's not retrospective.

[CHARLESBERG]

OP- have you filed a self assessment before?

How old is your child?

I ask because I missed the self assessment deadline due to a misunderstanding. I had a letter through stating my total pay is x (under the allowance). Months later, I had another letter my total income was y (over the allowance). I can’t remember the exact wording but the first one was my pay, the second figure included a company car ‘benefit’ figure. Hopefully Eric will be able to confirm exact wording.

I would recommend sorting out ASAP, if you’ve not done it before it will take approximately 3/4 weeks before you can access system and late charge goes up daily.

I got a letter saying they thought I might need to do a self assessment and I had 3 months from that date (as I had never done one before). Needless to say I had it sorted the next day!

[mikyccity]

CHARLESBERG said:

OP- have you filed a self assessment before?

How old is your child?

I ask because I missed the self assessment deadline due to a misunderstanding. I had a letter through stating my total pay is x (under the allowance). Months later, I had another letter my total income was y (over the allowance). I can’t remember the exact wording but the first one was my pay, the second figure included a company car ‘benefit’ figure. Hopefully Eric will be able to confirm exact wording.

I would recommend sorting out ASAP, if you’ve not done it before it will take approximately 3/4 weeks before you can access system and late charge goes up daily.

I got a letter saying they thought I might need to do a self assessment and I had 3 months from that date (as I had never done one before). Needless to say I had it sorted the next day!

No i have never filed a self assessment before.

My kids are 12 and 8 years old.

I have already registered myself for self assessment, just waiting to get an activation code. I have spoken to someone in HRMC today and he said deadline date has now moved to June instead of Jan. He said there will be no penalty charges. Let's see.

I never received any letter from HRMC. They did send out the letters to many people in past few years saying you might be effected by child tax or whatever it is called.

[Eric Mc]

They expect parents to know this now as it is an inherent part of the tax and benefit system and has been for a number of years.

[hepy]

Had a letter from HMRC regarding this a few weeks ago, so I would imagine a few more people will be getting them.

The letter basically says tell HMRC how much you owe in tax relative to child benefit for the tax years 12-18m and also we will send a self assessment for 18-19.

When you call them with the figures, they then ask why you didn't tell HMRC about the overpayment, and if your answer isn't satisfactory, your fine will increase.

Also told me I would get a letter within a week telling me how much I had to pay, and when to pay it by.

[mike9009]

Morning all,

Just completed my return - I earn just over the £60k threshold, but managed to only pay about £500 in tax against benefits of just over £1800. Use your pension contributions wisely!

Admittedly if I was even wiser I would pay no tax - but just cannot afford that with wife not working full time.

[hepy]

Currently take my company car allowance in cash and this means I go over the £50k threshold.

If I had an EV as a company car, and this was nil rated for company car tax (tax year 20-21), would this mean my P11d was nil and reduce gross ‘income’ and hence keep me below the threshold?

[xyz123]

Not sure if it's already posted. Apologies if it is.

If one person ewrns more than £60,000 you can stop them paying out the money but Co tinue child benefit. This way there is no need to fill in tax return just because of child benefit and your pension is still protected.

[Marlin45]

A query that was raised abve and a point of not the 'earnings' are based on the perceived total annual income in the tax year including employer beneifits (Co. car/private health etc.).

My actual earning fall marginally below the threshold of £50k but with the additional of the company car and health cover that adds £12k to the total. Hence child benefit becomes a big issue.

I received a mail shot from HMRC around Nov 2019 highlighting the CB issue (like most I had seen nothing before) and my better half also claims to have seen nothing. Any CB payments made to the household since 2017 (?) while the main earner exceeded the threshold need to be returned. So far I have paid off 2017/2018 but for the rest of the year my tax code is CK672X !

We are stopping CB but apparently that is 'her' money FFS.

[Eric Mc]

This restriction has been around since 2013 but the problem is that new parents are not made aware of it. So, it's "new" to them and they keep getting caught out.

Notifying the Benefits Agency that they should stop paying it is one solution but if your circumstances change during the year and your income level falls to a level where you are entitled to Child Benefit, you need to notify the Benefits Agency IMMEDIATELY because every month you delay you lose that month's Child Benefit forever (even though you were entitled to it).

[mfmman]

Eric Mc said:

Notifying the Benefits Agency that they should stop paying it is one solution but if your circumstances change during the year and your income level falls to a level where you are entitled to Child Benefit, you need to notify the Benefits Agency IMMEDIATELY because every month you delay you lose that month's Child Benefit forever (even though you were entitled to it).

Now I thought this to be the case as well, but a bit of googling suggests maybe not and that you can backdate (see here and scroll to the bottom)

https://www.accountingweb.co.uk/any-answers/opting...

But personally, and as I have posted before if you are on or around the threshold I would continue to recieve it then repay as you never know when circumstances may change. Not always for adverse reasons either, for example if you decided to go self employed and knew it would be a short period before you saw any income then good timing could see all of the tax change no longer applying

[Burwood]

mikyccity said:

PurpleTurtle said:

Also be careful about ‘stopping’ child benefit. If your wife isn’t claiming it, you are losing out on NI credits which will detrimentally affect her state pension,

Totally ridiculous system.

https://www.theguardian.com/money/2018/jul/28/bewa...

I didn't know about this.

May be worth getting child benefits and then return it at the end of the year.

That’s the idea. You don’t stop it, rather, you pay it back post return

[Red Leader]

I have just been told by my accountant that my earnings for 2018/19 (self assessment as I am self employed) have just gone over the £50k limit for the first time (by £3k) and he has told me that I cannot deduct pension contributions from this, for the benefit of CB and so in my tax return we are filing by the 31.01.20 I am paying back £400....has he got it wrong??

Wife earns £6k and benefit goes to her.

RL

[LittleBigPlanet]

We currently receive child benefit but, as of today, I've opted out. Is it worth continuing and paying back at the end of the year? I don't believe we'd gain anything from an NI perspective here (but willing to be told otherwise)!

Edited by LittleBigPlanet on Saturday 15th February 09:43

[mfmman]

Red Leader said:

I have just been told by my accountant that my earnings for 2018/19 (self assessment as I am self employed) have just gone over the £50k limit for the first time (by £3k) and he has told me that I cannot deduct pension contributions from this, for the benefit of CB and so in my tax return we are filing by the 31.01.20 I am paying back £400....has he got it wrong??

Wife earns £6k and benefit goes to her.

RL

I believe him to be wrong, unless the rules are different for the self employed.

[mfmman]

LittleBigPlanet said:

I'm (still) slightly confused by this!

We currently receive child benefit but, as of today, I've opted out (new job - see above). Is it worth continuing and paying back at the end of the year? I don't believe we'd gain anything from an NI perspective here (but willing to be told otherwise)!

On the face of it probably not, but circumstances change and if your income dropped abruptly you may become eligible again

I know SA is a bit of a faff, I end up doing it for other reasons so no hassle for me to do it for CB reasons even though I have never benefitted in real terms

Edited by topsey.mod on Saturday 15th February 09:56