We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
MSE News: Child benefit deadline for higher earners looms
Options

Former_MSE_Helen
Posts: 2,382 Forumite
"Around 220,000 people who earn over £50,000 and receive child benefit should register for tax self-assessment..."
Read the full story:
Child benefit deadline for higher earners looms

Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
Child benefit deadline for higher earners looms

Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
0
Comments
-
omg if i earned £500,000 a year i would do what princess Diana did and donate it to charity, an income of that size and taking benefits is just greed0
-
The children have no income. Child benefit is for their benefit, not that of their parents.
You appear to be assuming that the higher rate tax payer is the one getting the child benefit. This is not usually true. It's also not necessarily true that they are even living with the children or providing much money for their care.0 -
Surely this is a typo and it should read £50,000?0
-
I have a quick question if anyone can help me?
I've heard that you can avoid losing child benefit by paying more into your pension. However, surely that is only the case if you do salary sacrifice (and therefore your salary is effectively reduced by the amount you pay in)? I understand that paying for childcare vouchers (which comes out before tax) can also be used to reduce salary to lower than the £50K threshold.
I think there are lots of good reasons to pay more into pensions, but don't know if this is one of them!
Any ideas on how this would work are appreciated as I'm trying to get my head around it.0 -
Hi guys, thanks for flagging - £500,000 was a typo, and it's now been corrected to £50,000.0
-
sweaty_betty wrote: »I have a quick question if anyone can help me?
I've heard that you can avoid losing child benefit by paying more into your pension. However, surely that is only the case if you do salary sacrifice (and therefore your salary is effectively reduced by the amount you pay in)? I understand that paying for childcare vouchers (which comes out before tax) can also be used to reduce salary to lower than the £50K threshold.
I think there are lots of good reasons to pay more into pensions, but don't know if this is one of them!
Any ideas on how this would work are appreciated as I'm trying to get my head around it.
The amount used for the Child Benefit calculation is not you headline salary, it is your ‘adjusted net income’. This is (roughly) your pay, minus any (non-taxable) pension contributions, plus any benefits (car etc.)
So pension contributions do NOT have to be done by salary sacrifice in order to reduce your liability.
Look at your payslip, and find the amount which has been used to calculate you tax liability for that month. Multiply that by 12 and it will give you your taxable income (as long as your monthly income is regular). If it less than £4,166 you can keep all CB. if it is above £5,000 you lose it all.
Someone with a little time could work out more precise limits based on the amount of tax you pay each month, but I don't have the time or the numbers right now.
Note these calculations are rough. The tax form you fill in will be more precise. But I hope this answers your question.
This link will help you do a better calculation
https://www.gov.uk/child-benefit-tax-calculator0 -
That formula by Agrajag needs clarifying as you can make payments outside your pay to still qualify as well as through your payroll.
So for example you may get paid £5001 gross at work and have that appear on your payslip, but if you pay £670 per month personal pension contributions (grosses up to £838 which is the releif amount), or less likely £670 to charity under gift aid then you would still fall under the £50,000 limit.
http://www.hmrc.gov.uk/adjustednetincome/Adventure before Dementia!0 -
That is actually what I meant. I was talking about the amount of income used to calculate tax. I.e. AFTER pension and other contributions. So in your example monthly pay £5001, pension contrib £667
, so taxable income is £5001-£667=£4133... So no loss of benefit.0 -
Agrajag - how do you factor in car benefit (NOT cash allowance) whe looking at your payslip example? I don't think it works...0
-
TighterThanTwoCoatsOfPain wrote: »Agrajag - how do you factor in car benefit (NOT cash allowance) whe looking at your payslip example? I don't think it works...
Be on your P11D surely?
I actually spoke to the Tax office about this yesterday and the only thing i found out was they'd bu!!!!ed up my tax code.
They couldn't tell me anything helpful outside of i could self assess should i wish.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.9K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.9K Work, Benefits & Business
- 598.8K Mortgages, Homes & Bills
- 176.9K Life & Family
- 257.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards