Child Benefit - Tax Charge

RuleTheWorld

For those with earnings between £50k and £60k

What is in scope as earnings?

I know pension contributions clearly reduce the taxable earnings.

Do childcare vouchers reduce it too?

Does interest (and dividend) income get added or is this out of scope.

I know I'll need my p60 (earnings number) and p11d (benefits in kind number).

WorriedFriend2017

Interest income is added. No, childcare vouchers don't reduce it unfortunately. You can work it out on a number of websites and it'll also show you on the self assessment form before you submit it.

martinsurrey

WorriedFriend2017 wrote: »

Interest income is added. No, childcare vouchers don't reduce it unfortunately. You can work it out on a number of websites and it'll also show you on the self assessment form before you submit it.

this is wrong.

The base for the child benefit tax charge is taxable income. childcare vouchers are a salary sacrifice method, and as such reduce your taxable income.

The .gov calculator asks for "salary" this is your salary AFTER any salary sacrifice for things like cycle to work scheme and child care voucher (as this reduces your salary in return for a bike and/or vouchers).

kfidgett1

Apparently according to HMRC child care vouchers and any pension payments you may make from your salary pre tax ARE included in their calculation as to whether you earn to much to receive the child benefit.
We received a bill for over £5000 dating back to 2013 and tried to appeal and they stated that they are included. So much for non taxed child care. Apparently we should not have taken any notice of the total taxable earnings on the P60 as this isn't what they use!
Martin Lewis should make this the next campaign.

MonkeyDr

It's based on your adjusted net income:

https://www.gov.uk/child-benefit-tax-charge

Which is less pension contributions:

https://www.gov.uk/guidance/adjusted-net-income

kfidgett I would try and appeal further...

FWIW my husband has an accountant who does his tax return (so it should be legit), and I am certain that his pension contributions are taken into account when working out if / how much CB we have to repay.