Redundancy payment affecting child benefit entitlement

Yoges

Hi everyone,
I was made redundant in December after 18 years service and have received a pay-off totalling £85K (pre-tax). I was previously working full-time earning £38K and wife is still working part-time earning £14K, so we received the full child benefit for our two kids.

Am I right in thinking that I'll lose child benefit in April as the redundancy payment has pushed me over the £60K limit for this year? I'm not claiming JSA or child tax credits at the moment.

Thanks in advance,
Yoges.

dori2o

Yoges wrote: »

Hi everyone,
I was made redundant in December after 18 years service and have received a pay-off totalling £85K (pre-tax). I was previously working full-time earning £38K and wife is still working part-time earning £14K, so we received the full child benefit for our two kids.

Am I right in thinking that I'll lose child benefit in April as the redundancy payment has pushed me over the £60K limit for this year? I'm not claiming JSA or child tax credits at the moment.

Thanks in advance,
Yoges.

Assuming that you will receive the £85k in this tax year (remember the first £30k of redundancy is non taxable and will not count towards income for child benefit purposes) and your total taxable income in this tax year is in excess of £60k, then it is the child benefit you have/will have received since 6 April 2014 until 5 April 2015 that will be affected by this increase in taxable income.

If you expect that your income in the next tax year will be less than £60k then you will still be entitled to receive child benefit.

You still have the opportunity to bring your taxable income for the current year down by investing a lump sum into a pension so as to reduce your taxable income to below £60k.

If you choose not to, or are unable to reduce your taxable income for this tax year then at the end of the tax year you would need to repay the whole years child benefit back to HMRC.

Yoges

Thanks for your help.