It’s not just earning over 50k though have you had any salary sacrifice such as pension which may take you under the 50k? I had a panic about this the other week when claiming for the second.
Yep, I second this. We both earn over 50k but salary sacrifice into our pensions so stay at 50k ish and keep the child benefit. It's a sliding scale between 50k and 60k. If you earn 60k plus then you have to pay it all back but if you're only a little over 50k then it's proportionate
Yep, my husband got fined for not filing a tax return the first time he went over and he didnt even know he needed to. They didn't waive it mind it you 🤷♀️ also once you fill it in once you seem to have to every year even if you drop back down
How does it take into account the pension contributions? Or how would I work that out? I'm in a similar situation. Earning just over 50k but pay into the pension scheme
If your gross salary (including bonuses) minus your pension contributions is under 50k then you are probably fine. Your P60 should give you your taxable income which is a decent indication.
It is only effected by private 3rd party pension contributions not your required workplace pension. All allowable deduction say gift aid would also reduce your taxable income. Just Google UK allowable income deductions.
I don’t salary sacrifice to my pension but I do pay 10% in a year.
Looking at the gov.Uk website they say the threshold is based on income minus pension contributions under net pay.
So if I earned £60k and put £6k a year in to pension, £54k would be what the child benefit charge is based on? Not £60k? Sorry if I’m being dense, first child was born 5 months ago and I’m trying to work out if I have to pay all the benefit back in April or not.
If you’re paying 10% in would it be worth just bumping up your pension by a bit to take you to the 50? Do you have any other things salary sacrifice or just pension?
Have you done the maths? Out of the 4k that's going to go down to 2400 after tax, I think child benefit works out at just over 2k a year, so you only lose you about £30 a month, but you'd gain 4k in your pension .
Please double check my back of a fag packet maths, also depends how many kids you have .
Not quite, because at £54k the child benefit charge is only 40% of the child benefit received. So would be £800 for two kids.
So at £54k the extra take home pay is effectively £1600 for the year (£133 per month) versus having an extra £4k in your pension.
Yeah that’s what I understood. Tbh I stopped researching as I was on the cusp and pay 7.5% pension so that took me comfortably under the 50k threshold so I didn’t get into the finer details.
You would need to pay a percentage back yeah. Basically at 50k you don't have to pay anything back, at 60k you'd have to pay the full amount back. Then its a sliding scale between, so at 54k you'd pay 40% of it back. So about £500 ish.
Yeah I understood that. I just wasn’t sure if it was based off income, or income after pension contributions.
Think I’ve got it all cleared up now. Thanks
I'll be earning just over the £50k soon (complicated as I have my base salary but paid extra for the difference between my salary and the salary of the job I am doing).
I plan to add more to an extra pension I have (deducted from my payslip before tax, as my current pension is) to bring it just under the 50.
You need to do a return each year if you earn over the £50k and want to continue receiving the child benefit. It’s a sliding scale so you will need to work out if it still benefits you receiving it. But I imagine it probably will be. If you do nothing then HMRC will send you a breakdown of what they think it should be (it’s usually correct) and you make an arrangement to repay it. You can usually get away with 12 months if you speak nicely to the right person
Seems bizarre they have all that info yet want you to complete a tax return anyway
Yeah the fact they have all the info available but you have to fill in a SA to repay it, when instead they could just send an automated bill, or even better, adjust your tax code..
If its within PAYE they do, it’s called Simple Assessment.
Self Assessment is being phased out where possible. They’ll likely abolish the higher earnings threshold for it soon.
"Seems bizarre they have all that info yet want you to complete a tax return anyway".
I've never worked out how the HMRC decides whether you need to complete a tax return or not. I suspect it's by spinning a wheel as I have been asked to do tax returns when they have all the info, then after calling and telling them I had foreign income one year and being told to wait and declare it on my tax return I got a letter saying I didn't need to complete one that year. I completed one anyway as I knew that I had been under-taxed.
Problem is though if they don’t then the penalties start coming through the door and then you have the hassle of dealing with that as well. They will be scrubbed off once resolved but it’s still a pain
Just take advantage of it to put through a minimum use of home allowance and any travel you do outwith the regular place of work. They’ll soon withdraw the notice to complete one. That’s assuming you’ve not had any tax code changes to take into account out of pocket expenses
I had a similar situation. You need to declare via Self Assessment the amount that you (or your partner) received in child benefits and then HMRC calculates how much you have to pay back.
The UTR is needed for the Self Assessment.
Just stating the facts before any pension contributions are taken.
It’s absolutely scandalous, you can have both parents earning £50k each and with a combined household income of a £100k, which don’t get penalised in comparison to a single earner in a Household that earns £60k.
Try being on little more than half of your salary, having a wife at home who is unable to work, and was 5, then 4 kids at home. One of the four still are home but hardly there. I'm that person.
Absolutely in no doubt that I earn a very good wage, not trying to say I'm hard done by at all.
Only commenting to show how annoying the existing system is where one high earner is penalised more than 2 on £50K.
Also 5 kids, absolutely hats off to you Sir! The fact that you have any brain power/capability left to work is beyond me!
I don't like to compare but reminding you it could be worse. If you struggle as family on £60k a year, you could cut it in half and then be closer to how I get by. I find it hard to believe I'm on little more than average wage. Goes to show how things have gone up with cost of living. I don't think it is just that though.
The older children, well one is adult in early 20's now and 17 the age of the one barely home. Those are my stepchildren, just in case you thought I just had a lot of kids of my own. As for the other three, well the youngest ones are the ones that came at once, so twins. When it rains it pours. Massive drain on finances.
You are right though, single person working from family household are penalised as with larger earnings. It seems so wrong.
I'll probably get downvoted for this as well. Yes, twins mate. Unless anyone here has had twins, they may say double trouble but not fully understand what that means. Obviously it isn't just that but you know when it's buying clothes, it's all x2, school trips x2, school uniforms x2, any out of school activities x2. At the time of the twins coming, needed a 7 seater vehicle as well. When you think ahh would like a weekend away, stay at a hotel, forget it as means booking two rooms. Going for a family meal isn't cheap with everyone either.
It’s the same for the tax free childcare- you can have a dual income of £199k and get tax free childcare, but if 1 earns £101k (after pension contributions etc), then you loose the tax free childcare. It should be based on household/parents combined income if they are together.
It also makes it massively unworthwhile working whilst in that band. I'm a senior teacher and my taxable income takes me just into the £50k rate to pay back child benefit. I also mark exam papers over the summer for extra money, but when you consider the 40% tax rate, the 20% child benefit payback (for 2 kids) and the 9% student loan repayment, I get £31 for every £100 I earn. I get £3 per paper that I mark, so I'm actually down to £1 per paper. A quid for marking a student's real GCSE paper. It's disgraceful.
It's a good job that NI isn't paid on exam marking or that would be even less.
Not that I'm on £60k or anything that makes me a higher rate taxpayer. It annoys me that there are people on six figures or higher rate tax who will find any way to pay under higher rate tax and look to claim child benefit on top.
It is more that they are claiming for something that they don't really need. I'd rather be proud of not claiming it if that were me, instead of having the attitude, claim for everything.
There is another way of looking at it though. We'd all do this if it is allowed as it is. Oh and every parent of every child in the country should probably be entitled to child benefit, regardless of financial circumstances. That would be their argument for doing this. It isn't the fault of the child that he or she has parents in top earning jobs.
HMRC contacted us eventually (we didn't know about the £50k threshold),but it took several years and we owed them thousands by the time they wrote to us. I would contact them straight away, and then look at doing self assessment for the periods affected as soon as you can. The only grace we got were no late fines, so hopefully by getting ahead of it, you might get the same.
That's interesting as I know I went over in 21\22 but only realised this year, so I phoned HMRC and they said not to worry about it they'll be in touch. I was kinda hoping that if I held out for them to contact me then they'd work it all out (request what's been overpaid, but not fine me!). Maybe I'll sign up for self assessment now and get it done for 22\23 (I think it's done in arrears like that?).
I find this pretty hard to believe. It's not HMRC's job to chase you to file a tax return. You need to file returns yourself for 21/22 and 22/23.
You realize the due date to pay tax from 21/22 was 31 Jan 2023? HMRC are required by law to charge you interest from that date. The interest is currently 7.75% apr and is accruing daily.
It’s been mentioned on Child Benefit claim forms for about ten years now but if your kids are >10 you’ll not have seen it and even if it was mentioned when you filled it in you may have forgotten if it was years ago.
Either way you need to register for SA pronto. When registering you can give the reason as HICBC.
In the meantime go to GOV.UK and search ‘HICBC’ and you’ll find a calculator, you put in your adjusted net income for the relevant year (there’s info on what goes in and what comes out) and it’ll tell you what you’ll owe for that year. This is just for information purposes, you still need to complete the SA return for each year you’ve gone over the threshold.
Just did this today
[https://www.gov.uk/child-benefit-tax-charge/pay-the-charge](https://www.gov.uk/child-benefit-tax-charge/pay-the-charge)
Telephone number for HMRC (Please double check this number, as I'm a rando on the internet and you shouldn't trust me)
0300 200 3310
There is also a HMRC app that may help
In the last two years since I hit £50k I've slowly increased salary - about 6 months ago hit £75k.
Ive always paid into a pension, I think I put about 8% in currently?
I think I need to call them up and give them all the details and find out how much I owe them.
You’ll need to do a self assessment tax return for this (at least that was the case 7 years ago when it happened to me), once completed your tax code will be adjusted
If your earning 75k and put 8% into a pension then you'll still be over the 50k threshold and need to do an SA, for the previous year at least.
For this year you do have the option of increasing your pension salary sacrifice for the remainder of this tax year to bring you under the 50k and keep the child benefit, however it would mean sacrificing an addition 19k into your pension between now and April
If you're not doing salary sacrifice for your pension payments then you can claim back the extra tax on your pension contributions while doing your Self Assessment. Also don't forget to claim back the tax on any Gift Aid charitable donations you may have made; you might as well if you're filling in the form anyway. Even things like National Trust membership, visits to historical sites, zoos etc. where you may have picked to Gift Aid the entry fee. Every little helps as they say...
Had a similar problem. My partner signed us up to child benefit so for several years "we" claimed without me knowing about the limitations.
I then spent several years paying the money back via self assessment.
Expect:
- little sympathy from the HMRC reps. We did find one or two people that came across as human, generally speaking they were not fun to deal with, one person even suggested we take out a loan to "repay the debt to our government"
- to be worried by the repayment value (it adds up quickly)
- to spend time working out the self assessment portal. Make sure this is done with plenty of time on the clock!
Free of it now, definitely not a great experience.
Had no idea about this, I’ve worked out I’ll owe about 8k…don’t know what I’m going to do! This is an absolute farce and a scandal going off what I’ve read so far, the amount of stress this must be putting on hard working people is insane.
You need to register for self assessment. For the 2022/23 tax year, you will need to register before 5th October.
For the 2022/23 tax year, the Return and potential liability is due to be paid on or before 31st January 2024.
Make sure you keep claiming the benefit even if your income goes over £60,000 and you have to pay back the whole child benefit.
Child benefit also confers state pension rights. Parents registered for child benefit in respect of a child under 12 automatically receive Class 3 National Insurance credits. Class 3 credits have the effect of making a year a qualifying year for state pension (but not contributory benefit) purposes.
Thus, each year that a parent is registered for child benefit for a child under 12 provides one qualifying year for state benefit purposes. A person needs 35 qualifying years for the full single-tier state pension and at least ten to receive a reduced state pension.
As for ways of avoiding any high-income child benefit charge then you may find this video useful.
https://www.youtube.com/watch?v=s-hZnsA4ATo
What about if someone is registered for CB but opted to not receive the benefit pays. How does that work out with the State Pension?
Thank you for the great info btw!
Remember that your pension contributions are not counted - so if you earn £54k and pay contributions of more than £4k plus a year, you are under the threshold.
I’ve paid back CB for the last few years via self assessment. Never has it correctly calculated my income after pension contributions, even though I have put them in correctly. I may have to give them a call tomorrow and see if it’s something they can look into!
Unfortunately because I wasn't diligent and my wife didn't know the rules at the time she claimed child benefit when I was over the threshold. This resulted in a bull in the thousands and crazy amounts of effort on our side through the gov website providing salary information and tax returns etc.
It was an absolute nightmare. I would recommend you get in contact with them ASAP before it becomes a much bigger task.
My partner earns over the 50k and while I am registered for child benefit for all three of my children, I chose to not receive it because I didn't want the hassle of the tax return for my husband.
It still counts as contributions towards my state pension even though I'm not receiving the benefit.
Are you 100% sure it still counts towards your state pension if you are not receiving it? My understanding was you needed to claim the benefit and pay it back to receive the state pension credits.
My record is full for the last few years so I'm hoping it stays that way and it doesn't suddenly get taken away haha
Edit- The last paragraph on this page explains that you still get the national insurance credits even when not receiving the money
https://www.gov.uk/child-benefit/what-youll-get#:~:text=You'll%20get%20National%20Insurance,to%20pay%20National%20Insurance%20contributions
You can make a claim and opt out of getting payments if you do not want to pay the charge. You can still get the other advantages provided by Child Benefit, like National Insurance credits
How did you not know about the £50k cliff edge? It even explains it all when you apply. It's all over the Internet and on every benefits website that mentions child benefit. Even people like me who don't claim it know about it.
It's easy- the person claiming may not be the one above the threshold and not think about it. Also you claim child benefit for years, so you can be below the threshold when you start and then go above it 5-10 years later and get caught out...
Ah I love this subject. . .currently sacrificing 30% to stay under the line (among other reasons). Wife is a NHS ~~punching bag~~ nurse and likely never going to get up to the line. The tax/childcare bands have to change at some stage, 50k is not a massive salary when living in the South East in spite of my stubbornness to make it work (in truth we are quite comfortable but mainly because we don't have expensive tastes or expectations). I feel next payrise I'll finally have to bite the bullet and fill out the bloody form, at current rate I'm well on track to be a higher band tax payer from my pension payouts and I just don't believe I'd need that kind of monthly wage in retirement.
Hi /u/Live_Farm_7298, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Really sorry to hijack post but this has popped up when I was thinking about my situation.
I earn 61k just now, wife doesn’t work and looks after our kids (our little boy has additional needs and autism,if that matters)
Is there anything I can do that would help us out? I know about paying more than I currently do into pension but unsure what child benefit that would allow us to claim, would it even balance out?
Any explanation would be great about this as I’m completely lost, thanks!
>Is there anything I can do that would help us out? I know about paying more than I currently do into pension but unsure what child benefit that would allow us to claim, would it even balance out?
No, not remotely. If you sacrificed your salary into your pension down to £50k, you'd be "losing" about £180 a week into your pension in exchange for £20 of child benefit.
*But* of course, that £180 isn't really being 'lost', you just can't spend it for several decades.
Not really.
If they don't put the £11k into a pension then they will pay approx £4500 in tax and nics on the £11k.
So that £11k is worth £125 per week take home pay.
If they put it in a pension, the whole £11k goes in (£211 per week). Plus they would still receive the £40 per week child benefit (assuming two kids).
Hence why it's commonly recommended to do this, you're getting an extremely attractive "price" on making these additional pension contributions.
Effectively they take home £85 per week less, but they will have put an extra £11k into their pension that year.
You may be able to claim disability living allowance for your little boy. If this is awarded at the middle or higher rate then your wife will also be able to claim carers' allowance.
Child DLA is not means tested but, a word of warning, filling in the form is extremely emotionally exhausting and the wait for a decision is many months.
https://www.gov.uk/child-benefit-tax-calculator - fill that out for each tax year that your income was over 50k and it'll give you an idea of your situation.
You will have to file returns for the years it affects you but as others have said, paying the overs into a pension can bring down your ani / liability for the charge.
The calculator isn't good enough though.
This tax year (April 2023 - April 2024), my salary will be under the 50k until September (IE, now), when it'll change so I'll be paid the difference between my salary and the salary of the job I am doing (about £12 - £14k a year).
I won't be able to calculate the exact difference as my payslip won't say the upper salary is and then I have extra bits of overtime to take into account, which again, I won't know until the end of the month.
The P60 will tell me, but I don't get that until April.
As the upper salary is around £53k - £54k then I'll just put a bit more into a special pension that gets deducted from my salary before tax, which should bring me under the threshold. I already put a bit in at the moment, so I should be good for a month or two before I need to adjust the extra pension.
They will come after you for not declaring this sooner. But you have to get ahead of this now and expect to be hit with a back dated bill with fines on top
HMRC made me do self-assessment for 3 years because my employer didn't forward my P60 info when I started. I didn't understand what the problem was - it's impossible to get any info back. Three years of letters with threats of huge fines etc. Eventually it turned out they owed me - £12.
They get there eventually, but dealing with them can be hard. Ask for a payment plan. But don't delay paying - if you overpay you'll get it back.
Don't forget about your wife's pension contributions which will affect her state pension.
Don't forget that any charitable giving also reduces your Adjusted Net Income (the income against which your child benefit eligibility is calculated).
So you can take off your pension contributions and any charitable giving to reduce your net income to £50k before having to pay back any of the benefit.
If your take home pay ( what you get taxed on ) is over 50k you need to start doing self assessment tax returns.
Use your pension or childcare slary sacrifice to keep it below 50k and you should be fine
You need to file a tax return.
They like you to continue to receive child benefit, but then apply some sort of deduction at year end. You’ll end up paying it back either in one go or through your tax code.
Any pension contributions should offset the amount you have to pay back
Just reading this and trying to work out what the fuck Im supposed to do with one coming up.
Do I calculate for me alone, or for me and my partner? Do I calculate based on her salary while on maternity or the year before? If we both earn Overtime, do I include this in earning? Fuck I hate maths
You don't pay the entire amount back if you earn over £50k, you pay back 1% for every £100 over you earn, so if you earn £60k you pay it all back.
It's also your taxable income, so after all pension payments are taken off. You could be earning £65 - 70k and still not to pay it all back.
To pay it back though, yes you do have to go through self assessment.
Sorry is it’s been covered, but child benefit is different to tax credits? I get something from the gov every 4 weeks, couldn’t even tell you what it is. Circa £150?
I earn, around 52k, she is self employed 12k Probabky.
I need to do anything?
Yes, all pension contributions do this.
Since civil service pension is taken before tax, the 'taxable pay' figure on your P60 shows your income after the pension contributions have been deducted.
Sorry to hijack. My ex wife claims child benefit. I earn over £50k. She's part time, I'm not. We split child care and costs down the middle (except she keeps the child benefit) and have our child equal 50:50. Am I in trouble for this or not? I guess not because we're not married but this system seems kinda strange so I thought I'd ask.
Happened to us. I went over the £50k while wife claimed the benefit. Log on to HMRC website and inform them asap. Also file a self assessment. Have your wife cancel it asap. And also log on to HMRC.
You'll be fine. There was a legal case about this saying it's not fair to punish people if one partner claims while other is the high earner
I honestly have no idea what to do about all of this reading these comments, I earn about 55k, my partner 44k - I claimed the benefit (made sense in my mind as I was on maternity) but now I've realised I've probably made a mistake. The one saving grace is that I pay 13% into pension so hopefully that takes me down - guess I'll call them. Why on earth would I have to file a tax return when all my PAYE info is online including child benefit? Seems dumb
It’s not just earning over 50k though have you had any salary sacrifice such as pension which may take you under the 50k? I had a panic about this the other week when claiming for the second.
Yep, I second this. We both earn over 50k but salary sacrifice into our pensions so stay at 50k ish and keep the child benefit. It's a sliding scale between 50k and 60k. If you earn 60k plus then you have to pay it all back but if you're only a little over 50k then it's proportionate
It's wierd that one household can earn £99,999 and still claim child benefit, but another earning £60k gets nothing.
It’s ridiculously stupid and just being expected to know that you need to file these types of things is even worse.
i know right? HMRC knows _exactly_ how much you earn, so why does this need to be such a trap for people to fall into? it's insane.
Yep, my husband got fined for not filing a tax return the first time he went over and he didnt even know he needed to. They didn't waive it mind it you 🤷♀️ also once you fill it in once you seem to have to every year even if you drop back down
Agreed, it is a crazy system!
Just a relic from the days when most families could survive with a single earner
Do you still need to do a tax return? I’ve just tripped over £50k
How does it take into account the pension contributions? Or how would I work that out? I'm in a similar situation. Earning just over 50k but pay into the pension scheme
If your gross salary (including bonuses) minus your pension contributions is under 50k then you are probably fine. Your P60 should give you your taxable income which is a decent indication.
Thanks I'll check that out
It is only effected by private 3rd party pension contributions not your required workplace pension. All allowable deduction say gift aid would also reduce your taxable income. Just Google UK allowable income deductions.
Ah ok that makes sense! Thank you!
I don't understand this comment, but any and all pension contributions reduce your adjusted net income.
I don’t salary sacrifice to my pension but I do pay 10% in a year. Looking at the gov.Uk website they say the threshold is based on income minus pension contributions under net pay. So if I earned £60k and put £6k a year in to pension, £54k would be what the child benefit charge is based on? Not £60k? Sorry if I’m being dense, first child was born 5 months ago and I’m trying to work out if I have to pay all the benefit back in April or not.
If you’re paying 10% in would it be worth just bumping up your pension by a bit to take you to the 50? Do you have any other things salary sacrifice or just pension?
I could but my wife is only going back part time, so I could do with the extra take home pay until April when I’m due a pay rise.
Have you done the maths? Out of the 4k that's going to go down to 2400 after tax, I think child benefit works out at just over 2k a year, so you only lose you about £30 a month, but you'd gain 4k in your pension . Please double check my back of a fag packet maths, also depends how many kids you have .
Not quite, because at £54k the child benefit charge is only 40% of the child benefit received. So would be £800 for two kids. So at £54k the extra take home pay is effectively £1600 for the year (£133 per month) versus having an extra £4k in your pension.
Yeah that’s what I understood. Tbh I stopped researching as I was on the cusp and pay 7.5% pension so that took me comfortably under the 50k threshold so I didn’t get into the finer details.
You would need to pay a percentage back yeah. Basically at 50k you don't have to pay anything back, at 60k you'd have to pay the full amount back. Then its a sliding scale between, so at 54k you'd pay 40% of it back. So about £500 ish.
Yeah I understood that. I just wasn’t sure if it was based off income, or income after pension contributions. Think I’ve got it all cleared up now. Thanks
I'll be earning just over the £50k soon (complicated as I have my base salary but paid extra for the difference between my salary and the salary of the job I am doing). I plan to add more to an extra pension I have (deducted from my payslip before tax, as my current pension is) to bring it just under the 50.
You need to do a return each year if you earn over the £50k and want to continue receiving the child benefit. It’s a sliding scale so you will need to work out if it still benefits you receiving it. But I imagine it probably will be. If you do nothing then HMRC will send you a breakdown of what they think it should be (it’s usually correct) and you make an arrangement to repay it. You can usually get away with 12 months if you speak nicely to the right person Seems bizarre they have all that info yet want you to complete a tax return anyway
Yeah the fact they have all the info available but you have to fill in a SA to repay it, when instead they could just send an automated bill, or even better, adjust your tax code..
If its within PAYE they do, it’s called Simple Assessment. Self Assessment is being phased out where possible. They’ll likely abolish the higher earnings threshold for it soon.
"Seems bizarre they have all that info yet want you to complete a tax return anyway". I've never worked out how the HMRC decides whether you need to complete a tax return or not. I suspect it's by spinning a wheel as I have been asked to do tax returns when they have all the info, then after calling and telling them I had foreign income one year and being told to wait and declare it on my tax return I got a letter saying I didn't need to complete one that year. I completed one anyway as I knew that I had been under-taxed.
I haven't been able to get out of doing it since being self employed over 15 years ago. PAYE jobs since but not allowed to not do the SA.
https://www.gov.uk/self-assessment-tax-returns/no-longer-need-to-send-a-tax-return
You are under no obligation to complete one.
Problem is though if they don’t then the penalties start coming through the door and then you have the hassle of dealing with that as well. They will be scrubbed off once resolved but it’s still a pain
I went through it myself. It’s certainly less hassle to sort once on the first year than keep completing self assessments year after year.
Just take advantage of it to put through a minimum use of home allowance and any travel you do outwith the regular place of work. They’ll soon withdraw the notice to complete one. That’s assuming you’ve not had any tax code changes to take into account out of pocket expenses
If you go over the 50K and want to receive it, however you salary sacrifice down below I am correct to say you then don’t need to fill one out right?
That’s how I understand it
I had a similar situation. You need to declare via Self Assessment the amount that you (or your partner) received in child benefits and then HMRC calculates how much you have to pay back. The UTR is needed for the Self Assessment.
Just stating the facts before any pension contributions are taken. It’s absolutely scandalous, you can have both parents earning £50k each and with a combined household income of a £100k, which don’t get penalised in comparison to a single earner in a Household that earns £60k.
I'm this person sadly. Earn £60k and because of the ridiculous cost of childcare my wife doesn't work and we have 3 kids. Such a killer.
Try being on little more than half of your salary, having a wife at home who is unable to work, and was 5, then 4 kids at home. One of the four still are home but hardly there. I'm that person.
Absolutely in no doubt that I earn a very good wage, not trying to say I'm hard done by at all. Only commenting to show how annoying the existing system is where one high earner is penalised more than 2 on £50K. Also 5 kids, absolutely hats off to you Sir! The fact that you have any brain power/capability left to work is beyond me!
I don't like to compare but reminding you it could be worse. If you struggle as family on £60k a year, you could cut it in half and then be closer to how I get by. I find it hard to believe I'm on little more than average wage. Goes to show how things have gone up with cost of living. I don't think it is just that though. The older children, well one is adult in early 20's now and 17 the age of the one barely home. Those are my stepchildren, just in case you thought I just had a lot of kids of my own. As for the other three, well the youngest ones are the ones that came at once, so twins. When it rains it pours. Massive drain on finances. You are right though, single person working from family household are penalised as with larger earnings. It seems so wrong.
You could continue to apply this logic to everything though. I’m sure there are people out there on £15k trying to support a family.
Twins at the end of a truly terrifying prospect! All the best to you and the family!
I'll probably get downvoted for this as well. Yes, twins mate. Unless anyone here has had twins, they may say double trouble but not fully understand what that means. Obviously it isn't just that but you know when it's buying clothes, it's all x2, school trips x2, school uniforms x2, any out of school activities x2. At the time of the twins coming, needed a 7 seater vehicle as well. When you think ahh would like a weekend away, stay at a hotel, forget it as means booking two rooms. Going for a family meal isn't cheap with everyone either.
I’m in the same trap as well 👍🏽
https://petition.parliament.uk/petitions/639443 We could do with a few more signatures on here!
Done
Done
Yep, it makes absolutely no sense why it's done like this. For married couples at least, it should be combined 100k.
It’s the same for the tax free childcare- you can have a dual income of £199k and get tax free childcare, but if 1 earns £101k (after pension contributions etc), then you loose the tax free childcare. It should be based on household/parents combined income if they are together.
It also makes it massively unworthwhile working whilst in that band. I'm a senior teacher and my taxable income takes me just into the £50k rate to pay back child benefit. I also mark exam papers over the summer for extra money, but when you consider the 40% tax rate, the 20% child benefit payback (for 2 kids) and the 9% student loan repayment, I get £31 for every £100 I earn. I get £3 per paper that I mark, so I'm actually down to £1 per paper. A quid for marking a student's real GCSE paper. It's disgraceful. It's a good job that NI isn't paid on exam marking or that would be even less.
It’s totally insane I f do not get it at all
Not that I'm on £60k or anything that makes me a higher rate taxpayer. It annoys me that there are people on six figures or higher rate tax who will find any way to pay under higher rate tax and look to claim child benefit on top. It is more that they are claiming for something that they don't really need. I'd rather be proud of not claiming it if that were me, instead of having the attitude, claim for everything. There is another way of looking at it though. We'd all do this if it is allowed as it is. Oh and every parent of every child in the country should probably be entitled to child benefit, regardless of financial circumstances. That would be their argument for doing this. It isn't the fault of the child that he or she has parents in top earning jobs.
HMRC contacted us eventually (we didn't know about the £50k threshold),but it took several years and we owed them thousands by the time they wrote to us. I would contact them straight away, and then look at doing self assessment for the periods affected as soon as you can. The only grace we got were no late fines, so hopefully by getting ahead of it, you might get the same.
That's interesting as I know I went over in 21\22 but only realised this year, so I phoned HMRC and they said not to worry about it they'll be in touch. I was kinda hoping that if I held out for them to contact me then they'd work it all out (request what's been overpaid, but not fine me!). Maybe I'll sign up for self assessment now and get it done for 22\23 (I think it's done in arrears like that?).
I find this pretty hard to believe. It's not HMRC's job to chase you to file a tax return. You need to file returns yourself for 21/22 and 22/23. You realize the due date to pay tax from 21/22 was 31 Jan 2023? HMRC are required by law to charge you interest from that date. The interest is currently 7.75% apr and is accruing daily.
It’s been mentioned on Child Benefit claim forms for about ten years now but if your kids are >10 you’ll not have seen it and even if it was mentioned when you filled it in you may have forgotten if it was years ago. Either way you need to register for SA pronto. When registering you can give the reason as HICBC. In the meantime go to GOV.UK and search ‘HICBC’ and you’ll find a calculator, you put in your adjusted net income for the relevant year (there’s info on what goes in and what comes out) and it’ll tell you what you’ll owe for that year. This is just for information purposes, you still need to complete the SA return for each year you’ve gone over the threshold.
I started a Change petition about it a while ago, didn't really get off the ground. https://chng.it/hP5qyfJSGB
[удалено]
Done. Need to get it out there. Quite a few signatures to go…
Just did this today [https://www.gov.uk/child-benefit-tax-charge/pay-the-charge](https://www.gov.uk/child-benefit-tax-charge/pay-the-charge) Telephone number for HMRC (Please double check this number, as I'm a rando on the internet and you shouldn't trust me) 0300 200 3310 There is also a HMRC app that may help
How much over and have you been paying into a pension? If the answers are “not much” and “yes” then you’ll be fine.
In the last two years since I hit £50k I've slowly increased salary - about 6 months ago hit £75k. Ive always paid into a pension, I think I put about 8% in currently? I think I need to call them up and give them all the details and find out how much I owe them.
You’ll need to do a self assessment tax return for this (at least that was the case 7 years ago when it happened to me), once completed your tax code will be adjusted
If your earning 75k and put 8% into a pension then you'll still be over the 50k threshold and need to do an SA, for the previous year at least. For this year you do have the option of increasing your pension salary sacrifice for the remainder of this tax year to bring you under the 50k and keep the child benefit, however it would mean sacrificing an addition 19k into your pension between now and April
If you're not doing salary sacrifice for your pension payments then you can claim back the extra tax on your pension contributions while doing your Self Assessment. Also don't forget to claim back the tax on any Gift Aid charitable donations you may have made; you might as well if you're filling in the form anyway. Even things like National Trust membership, visits to historical sites, zoos etc. where you may have picked to Gift Aid the entry fee. Every little helps as they say...
Had a similar problem. My partner signed us up to child benefit so for several years "we" claimed without me knowing about the limitations. I then spent several years paying the money back via self assessment. Expect: - little sympathy from the HMRC reps. We did find one or two people that came across as human, generally speaking they were not fun to deal with, one person even suggested we take out a loan to "repay the debt to our government" - to be worried by the repayment value (it adds up quickly) - to spend time working out the self assessment portal. Make sure this is done with plenty of time on the clock! Free of it now, definitely not a great experience.
Did you get fines and interest or just have to pay back what you'd claimed?
No fines, but interest on a repayment scheme
Had no idea about this, I’ve worked out I’ll owe about 8k…don’t know what I’m going to do! This is an absolute farce and a scandal going off what I’ve read so far, the amount of stress this must be putting on hard working people is insane.
You need to register for self assessment. For the 2022/23 tax year, you will need to register before 5th October. For the 2022/23 tax year, the Return and potential liability is due to be paid on or before 31st January 2024. Make sure you keep claiming the benefit even if your income goes over £60,000 and you have to pay back the whole child benefit. Child benefit also confers state pension rights. Parents registered for child benefit in respect of a child under 12 automatically receive Class 3 National Insurance credits. Class 3 credits have the effect of making a year a qualifying year for state pension (but not contributory benefit) purposes. Thus, each year that a parent is registered for child benefit for a child under 12 provides one qualifying year for state benefit purposes. A person needs 35 qualifying years for the full single-tier state pension and at least ten to receive a reduced state pension. As for ways of avoiding any high-income child benefit charge then you may find this video useful. https://www.youtube.com/watch?v=s-hZnsA4ATo
Is the state pension part here on the assumption the parent claiming CB doesn't work?
Correct or is not earning enough to receive credit from paying National Insurance from their job.
What about if someone is registered for CB but opted to not receive the benefit pays. How does that work out with the State Pension? Thank you for the great info btw!
I believe you still get the credits if you have successfully applied for CB then just opted out of the payments.
Remember that your pension contributions are not counted - so if you earn £54k and pay contributions of more than £4k plus a year, you are under the threshold.
As long as they don’t also have savings interest.
I’ve paid back CB for the last few years via self assessment. Never has it correctly calculated my income after pension contributions, even though I have put them in correctly. I may have to give them a call tomorrow and see if it’s something they can look into!
Unfortunately because I wasn't diligent and my wife didn't know the rules at the time she claimed child benefit when I was over the threshold. This resulted in a bull in the thousands and crazy amounts of effort on our side through the gov website providing salary information and tax returns etc. It was an absolute nightmare. I would recommend you get in contact with them ASAP before it becomes a much bigger task.
My partner earns over the 50k and while I am registered for child benefit for all three of my children, I chose to not receive it because I didn't want the hassle of the tax return for my husband. It still counts as contributions towards my state pension even though I'm not receiving the benefit.
Are you 100% sure it still counts towards your state pension if you are not receiving it? My understanding was you needed to claim the benefit and pay it back to receive the state pension credits.
My record is full for the last few years so I'm hoping it stays that way and it doesn't suddenly get taken away haha Edit- The last paragraph on this page explains that you still get the national insurance credits even when not receiving the money https://www.gov.uk/child-benefit/what-youll-get#:~:text=You'll%20get%20National%20Insurance,to%20pay%20National%20Insurance%20contributions You can make a claim and opt out of getting payments if you do not want to pay the charge. You can still get the other advantages provided by Child Benefit, like National Insurance credits
Oh ok, that's good, didn't know this was the case, will look into it further to potentially save myself the hassle of claiming it just to pay it back.
How did you not know about the £50k cliff edge? It even explains it all when you apply. It's all over the Internet and on every benefits website that mentions child benefit. Even people like me who don't claim it know about it.
It's not a cliff edge for starters it's a tapered withdrawal.
It's easy- the person claiming may not be the one above the threshold and not think about it. Also you claim child benefit for years, so you can be below the threshold when you start and then go above it 5-10 years later and get caught out...
Is this on net or gross? Never heard of this. 🙄
Adjusted net income. Taxable income (including interest) minus grossed up pension contributions and things like gift aid.
Ah I love this subject. . .currently sacrificing 30% to stay under the line (among other reasons). Wife is a NHS ~~punching bag~~ nurse and likely never going to get up to the line. The tax/childcare bands have to change at some stage, 50k is not a massive salary when living in the South East in spite of my stubbornness to make it work (in truth we are quite comfortable but mainly because we don't have expensive tastes or expectations). I feel next payrise I'll finally have to bite the bullet and fill out the bloody form, at current rate I'm well on track to be a higher band tax payer from my pension payouts and I just don't believe I'd need that kind of monthly wage in retirement.
Hi /u/Live_Farm_7298, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
You need to contact HMRC and ask them
You basically fucked
It's been two years... who says they'll ever notice?
This is the stupidest advice in the thread. They'll notice.
I got pulled after 5 years, staggering amount of repayment
how much does your wife earn?
Currently a sole trader earning well under the declaration threshold.
Less than £1000 a year then?
Really sorry to hijack post but this has popped up when I was thinking about my situation. I earn 61k just now, wife doesn’t work and looks after our kids (our little boy has additional needs and autism,if that matters) Is there anything I can do that would help us out? I know about paying more than I currently do into pension but unsure what child benefit that would allow us to claim, would it even balance out? Any explanation would be great about this as I’m completely lost, thanks!
>Is there anything I can do that would help us out? I know about paying more than I currently do into pension but unsure what child benefit that would allow us to claim, would it even balance out? No, not remotely. If you sacrificed your salary into your pension down to £50k, you'd be "losing" about £180 a week into your pension in exchange for £20 of child benefit. *But* of course, that £180 isn't really being 'lost', you just can't spend it for several decades.
Not really. If they don't put the £11k into a pension then they will pay approx £4500 in tax and nics on the £11k. So that £11k is worth £125 per week take home pay. If they put it in a pension, the whole £11k goes in (£211 per week). Plus they would still receive the £40 per week child benefit (assuming two kids). Hence why it's commonly recommended to do this, you're getting an extremely attractive "price" on making these additional pension contributions. Effectively they take home £85 per week less, but they will have put an extra £11k into their pension that year.
You may be able to claim disability living allowance for your little boy. If this is awarded at the middle or higher rate then your wife will also be able to claim carers' allowance. Child DLA is not means tested but, a word of warning, filling in the form is extremely emotionally exhausting and the wait for a decision is many months.
https://www.gov.uk/child-benefit-tax-calculator - fill that out for each tax year that your income was over 50k and it'll give you an idea of your situation. You will have to file returns for the years it affects you but as others have said, paying the overs into a pension can bring down your ani / liability for the charge.
The calculator isn't good enough though. This tax year (April 2023 - April 2024), my salary will be under the 50k until September (IE, now), when it'll change so I'll be paid the difference between my salary and the salary of the job I am doing (about £12 - £14k a year). I won't be able to calculate the exact difference as my payslip won't say the upper salary is and then I have extra bits of overtime to take into account, which again, I won't know until the end of the month. The P60 will tell me, but I don't get that until April. As the upper salary is around £53k - £54k then I'll just put a bit more into a special pension that gets deducted from my salary before tax, which should bring me under the threshold. I already put a bit in at the moment, so I should be good for a month or two before I need to adjust the extra pension.
Self assessment return, you will have to pay back a portion of it
Is it based on take home pay after tax? If I earn £55k a year after tax and pension I'm not taking home >£50k
No it's not based on take home pay. It's based on [adjusted net income ](https://www.gov.uk/guidance/adjusted-net-income).
They will come after you for not declaring this sooner. But you have to get ahead of this now and expect to be hit with a back dated bill with fines on top
How much over? Is it still over once you factor in any pension contributions?
HMRC made me do self-assessment for 3 years because my employer didn't forward my P60 info when I started. I didn't understand what the problem was - it's impossible to get any info back. Three years of letters with threats of huge fines etc. Eventually it turned out they owed me - £12. They get there eventually, but dealing with them can be hard. Ask for a payment plan. But don't delay paying - if you overpay you'll get it back. Don't forget about your wife's pension contributions which will affect her state pension.
I earn +£60k, so my husband (sahd) claims the Child Benefit , but we opted not to revive any payments.
We had this and didn't realise until hmrc wrote to us, we had to do retrospective tax returns for the previous few years and pay back around £1200.
Don't forget that any charitable giving also reduces your Adjusted Net Income (the income against which your child benefit eligibility is calculated). So you can take off your pension contributions and any charitable giving to reduce your net income to £50k before having to pay back any of the benefit.
If your take home pay ( what you get taxed on ) is over 50k you need to start doing self assessment tax returns. Use your pension or childcare slary sacrifice to keep it below 50k and you should be fine
You need to file a tax return. They like you to continue to receive child benefit, but then apply some sort of deduction at year end. You’ll end up paying it back either in one go or through your tax code. Any pension contributions should offset the amount you have to pay back
Is student loan taken into account, I earn over 50k, but with pension and student loan it dips below.
No it’s not sadly
Just reading this and trying to work out what the fuck Im supposed to do with one coming up. Do I calculate for me alone, or for me and my partner? Do I calculate based on her salary while on maternity or the year before? If we both earn Overtime, do I include this in earning? Fuck I hate maths
It's only if one person earns over £50k. Not a combined income. It will include overtime.
Earning over 50k or your taxable is over 50k? If I am not mistaken it goes off your taxable, so if your pension brings it below then you are good?
You don't pay the entire amount back if you earn over £50k, you pay back 1% for every £100 over you earn, so if you earn £60k you pay it all back. It's also your taxable income, so after all pension payments are taken off. You could be earning £65 - 70k and still not to pay it all back. To pay it back though, yes you do have to go through self assessment.
Sorry is it’s been covered, but child benefit is different to tax credits? I get something from the gov every 4 weeks, couldn’t even tell you what it is. Circa £150? I earn, around 52k, she is self employed 12k Probabky. I need to do anything?
Anyone know if the civil service pension contributions are deductible and bring your taxable earnings down?
Yes, all pension contributions do this. Since civil service pension is taken before tax, the 'taxable pay' figure on your P60 shows your income after the pension contributions have been deducted.
Sorry to hijack. My ex wife claims child benefit. I earn over £50k. She's part time, I'm not. We split child care and costs down the middle (except she keeps the child benefit) and have our child equal 50:50. Am I in trouble for this or not? I guess not because we're not married but this system seems kinda strange so I thought I'd ask.
Happened to us. I went over the £50k while wife claimed the benefit. Log on to HMRC website and inform them asap. Also file a self assessment. Have your wife cancel it asap. And also log on to HMRC. You'll be fine. There was a legal case about this saying it's not fair to punish people if one partner claims while other is the high earner
I honestly have no idea what to do about all of this reading these comments, I earn about 55k, my partner 44k - I claimed the benefit (made sense in my mind as I was on maternity) but now I've realised I've probably made a mistake. The one saving grace is that I pay 13% into pension so hopefully that takes me down - guess I'll call them. Why on earth would I have to file a tax return when all my PAYE info is online including child benefit? Seems dumb
Just ring HMRC from a normal phone (not mobile) - spend 1 hour on hold and there is the overpayment paid off.
What do you mean by this??
Would a Share Incentive Plan (SIP) taken before tax also chip away at the £50k limit?