Child Benefit for higher earners

hharrison15

Hi all, was wondering if someone can help me.

Until September, my partner earned £53k a year, but the amount he paid into his pension meant that we were still eligible for the full amount of Child Benefit and therefore continued to claim (we checked this was OK with HMRC).

In September he was given an unexpected promotion, which took his wages to £70k. We immediately notified HMRC, who stopped our payments accordingly. However, they say that we will now have to fill in a self-assessment at the end of the tax year, and based on his current earnings, will have to pay back all the Child Benefit which we claimed from April - September (which we were fully entitled to at the time based on the lower wages).

Does anybody know if this is correct? It seems a bit odd that we should have to pay back a retrospective amount which was correctly claimed, and we notified them as soon as the change in wages took place.

Many thanks in advance.

mrcow

Has he earned over the threshold this year?

If so, he will have to pay it all back.

hharrison15

By the end of the 2013/2014 tax year he will have, but we were under the threshold for the period we claimed for.

tyllwyd

But they have linked the child benefit to the tax system, and your final tax bill is always based on the amount you have earned over the entire tax year. And if you think about it, if it wasn't that way you could deliberately structure your salary so that you were paid, say £10K over the year and £60K in bonuses on the last day of the tax year. So although I don't agree with what they've done to child benefit, it is logical that you should have to claim based on the earnings over the whole year. (But it might be worth doing the figures to see if it would be worthwhile increasing his pension contributions, because he won't have earned £70K over the entire tax year, it is going to be more like £60K on average.)

Gigglepig

Hi OP congratulations on your partner's promotion. Since your partner was promoted partway through the year, would it be an option to pay a bit extra in pension and max out on childcare vouchers etc to bring the income below the limit this financial year?

jacklink

i dont think you have any financial worrys with wages jumping from £53,000 a year to £70,000 a year for the sake of £19 a week, in effect your getting approx £1400 a week, thats money most of us dream of but usually earn a month through hard slog, good luck