Child benefit cuts

selinaw001

Am hoping someone can help me with understanding the child benefit cut ! My husband usually earns 50k but in tax year 12/13 he will have earned around 60k after having a redundancy payment. I know this means we will have to pay back what we have had in child benefit between jan and april this year and he is planning on filling in a self assessment later in the year, however i am pretty confused about paying this back, do we have to pay it all in one go next January or can it be paid back through his PAYE ? after looking on the HMRC website it says The charge for jan to april this year cannot be paid through your tax code but other places says it can . Also what will happen about the fact that over the next few tax years he is unlikely to earn anything like 60K .

xylophone

But is this redundancy payment taxable and can it be regarded as a part of the adjusted net income?

In your circumstances I would set the facts out clearly on paper and either write to or telephone HMRC for specific advice in your circumstances. http://search2.hmrc.gov.uk/kb5/hmrc/contactus/view.page?record=LNktdzH4gr0

gkerr4

yeah - you need to look at the 'taxable' amount - the redundancy payment may contain a non-taxable element which doesn't count. he 'will' need to register for self assessment though and this will guide him through the amount he owes.

sensible to put an amount in a dedicated account to settle the tax bill at the end of the year. I have one which barclays allows me to rename as "taxman's account" and i put some money away each month to ensure i can settle any bill.

Dazed_and_confused

Going back to your original question re payment of the tax - what have you read which makes you think the tax due from the child benefit it can't be paid via his code?

You may be confusing a code change now (12/13) to collect the tax now as opposed to the self assessment bill for 12/13 being collected via his code. If the return was in by the correct time (31 Dec 2013?) then tax due would normally be collected via 14/15 tax code (although this assumes total tax due is less than 3000 and he earns enough for the lower code to be used correctly)

I don't remember anyone else posting this as a concern but could have missed it