child benefit charge, reclaimed through tax code..?

canonbeck

Hello All,

I'm looking for some advice on the child benefit tax charge that it looks like I'll be unable to avoid from here on out...

I know there is an option to have the amount owed clawed back through my tax code as I saw the option on last years self assessment form.

My question is, if in my next SA I tick the box and pay nothing back with my return, will they adjust my tax code just for the years worth of money I owe them or 2 years worth?

My thinking is, next year the child benefit will still be rolling in and will make up for the reduction in income due to the adjusted tax code - assuming they reclaim the full amount over the entire tax year.

The only problem will come when my kids become too old for child benefit and I'll need to repay a years worth after they stop paying it to me.

Of course, if they adjust my code for 2 years worth then this is all wrong and it'll hurt - so it may be better just to pay back the full amount with my SA return.

Anyway, anyone have experience of this? Any/all help or advice is appreciated...

Cheers

Spidernick

If you file your 15/16 tax return by 31 January 2017* and opt for the underpayment (including the child benefit claw back) to be collected through your tax code (up to £3K, I believe), then this will apply from the start of the next tax year, i.e. 17/18. In that year they will assume that the same claw back will be due for 17/18 and so will also adjust your code to account for that, so you would be hit twice, once for an actual liability for a previous year and again for the estimated liability for the year itself. Note that HMRC will probably seek to change your code for the latter in any case.

dano17439

Why don't you do your tax return now so the reduction wont hurt as much rather than waiting to Jan 16?

xylophone

Would additional pension payments help?

http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/child-benefit-charge-planning

http://www.theguardian.com/money/2013/sep/28/child-benefit-pension-contributions-higher-earners

dori2o

Spidernick wrote: »

If you file your 15/16 tax return by 31 January 2017* and opt for the underpayment (including the child benefit claw back) to be collected through your tax code (up to £3K, I believe), then this will apply from the start of the next tax year, i.e. 17/18. In that year they will assume that the same claw back will be due for 17/18 and so will also adjust your code to account for that, so you would be hit twice, once for an actual liability for a previous year and again for the estimated liability for the year itself. Note that HMRC will probably seek to change your code for the latter in any case.

Just to point out...

In order to have an amount of tax owed from self assessment included in your tax code in the following tax year you have to have the online return submitted by 30 December, not 31 January, and the paper return submitted before the 31 October deadline

Many people miss this bit of detail and get rather upset when HMRC refuse to code out underpayments for returns that have been submitted after 30/12 but before 31/01.

Spidernick

Yes, I realised that straight after and hence the edit that you seem to have missed!

dori2o

Spidernick wrote: »

Yes, I realised that straight after and hence the edit that you seem to have missed!

I didn‘t miss anything, I merely pointed out the date by which the returns have to be submitted, something you didn‘t make clear in your post.