Child Benefit changes - how is income calculated?

waccamole

I understand the rules for the child benefit changes coming in January but I can't find a definite answer on how income will be defined in layperson's terms.

When I rang the child benefit and HMRC help lines a couple of weeks ago they just said they'd be writing to those affected 'soon' and even that 'it's not coming in until January' so basically 'what are you worrying about it now for?'.

January ain't very far away and if I'm going to lose roughly £188 net income then I'd like to know about it now thanks!

I believe pension contributions are deducted but I can't find out if any other salary sacrifice benefits are.

Also, what about taxable benefits like company car? Are they added back in?

I may need to stop some salary sacrifice benefits as I'll need more income and I only get one opportunity a year to make changes.

Cheers

P.S. Before anyone starts down the 'if you earn over £50K you can't need the money' track - single income of just over £50K to support family of 5 isn't massive, we pay more tax than a family with two earning £25K each etc. etc. etc.

zagfles

See http://www.hmrc.gov.uk/budget2012/tiin-0620.pdf

Any salary sacrifice which lowers your taxable income will work, but any taxable benefits will count towards your income.

HMRC saying "what are you worring now for" is a bit stupid of them as it's your income over this tax year ie from April 2012 which will affect the child ben reduction from Jan-Mar 2013.

Pension contributions is the usual way to lower your taxable income. Also make sure you keep a record of all your gift aids - which can include admissions to lots of places like zoos, historic buildings, space centre, National Trust, English Heitage membership etc...all that is deducted from your "adjusted net income"

Lots of threads on here about it, though the search function seems to be up the spout at the moment (& ignore all the moralising - the vast majority who do it haven't got a clue and quickly run away when you start talking numbers...)