Child Benefit High Income

Fiddlesticks_2

Hi all,

Just noticed my final payslip of the year shows my taxable pay at £51,600. My wife is claiming child benefit for the two teenagers still in education.

Always been PAYE, never filled in a tax return in my life, and not sure where to start. I guess burying my head in the sand is not a good option :-)

I do work from home a couple of days a week, so there is the opportunity there to claim some tax back.

I also get some medical/personal cover with work (probably around £60 per month's worth). Not sure how these are recorded (they don't appear on my payslip - I might have a P60 or P11 somewhere).

I do payroll giving of £105 per month, but my other charitable donations are to charities not registered in the UK.

Understand that I'm going to have to fill out a self-assessment (shudders) - and I think it has to be done by October to cover the period April 6th 2017 to April 5th 2018

Is this correct? Can I make a one-off charitable contribution or pension contribution before April 5th rather than paying the high income child benefit charge?

AdamBrunt

Fiddlesticks wrote: »

Hi all,

Just noticed my final payslip of the year shows my taxable pay at £51,600. My wife is claiming child benefit for the two teenagers still in education.

Always been PAYE, never filled in a tax return in my life, and not sure where to start. I guess burying my head in the sand is not a good option :-)

I do work from home a couple of days a week, so there is the opportunity there to claim some tax back.

I also get some medical/personal cover with work (probably around £60 per month's worth). Not sure how these are recorded (they don't appear on my payslip - I might have a P60 or P11 somewhere).

I do payroll giving of £105 per month, but my other charitable donations are to charities not registered in the UK.

Understand that I'm going to have to fill out a self-assessment (shudders) - and I think it has to be done by October to cover the period April 6th 2017 to April 5th 2018

Is this correct? Can I make a one-off charitable contribution or pension contribution before April 5th rather than paying the high income child benefit charge?

That sounds correct me, and you could indeed make a one-off charitable / pension contribution to get your nett income down further.

However, given what you have said, your adjusted nett income may work out as under the £50k threshold already. Even if it didn't, from personal experience this past week, I can tell you that a nett income of £51,600 would only incur a charge of about £700 [ provided you pay it in time ]

The Child Benefit High Income charge is a sliding scale; if your adjusted nett income is less than £50k then you are allowed to get the full amount of benefit but it then gets less and less til, once it reaches £60k (or more), you are not allowed to receive any child benefit at all.

Incidently, I have always been told by an accountant friend that it is good practice to fill in a self assessment every year you have a P11D or qualify as a higher rate tax payer

Darksparkle

Use this to work out your adjusted net income - https://www.gov.uk/guidance/adjusted-net-income

BoGoF

You should receive a P11d showing your taxable medical benefit by 5th July. You could do as you suggest and make a gift aid/pension payment by 5th April. However bear in mind that based on your salary and estimated P11D benefit that you wouldn't be required to pay all the child benefut back - there is a calculator on the GOV website. Have to confess I am sometimes confused why people are happy to pay way more than the charge to avoid paying the charge. I do realise the tax relief implications of paying into the pension but if you could afford to do so you should have been paying into anyway?

Fiddlesticks_2

I'm more interested in staying out of self-assessment, but I have a feeling that won't be possible.

BoGoF

AdamBrunt wrote: »

However, given what you have said, your adjusted nett income may work out as under the £50k threshold already

Can you elaborate on this please....how are you calculating that?

AdamBrunt

BoGoF wrote: »

Can you elaborate on this please....how are you calculating that?

The £50k threshold for Child Benefit High Income charge is not just your gross salary; you are allowed to take off stuff like Gift Aid and pension contributions. And it is the figure you get after doing that which is important.

For example ... with enough pension/gift aid contributions, a gross salary of £51,600 (say) could easily come in under the threshold

BoGoF

I get that but in the OP situation they have made charitable donations through payroll giving so that will be reflected in taxable pay figure. Same if regular pension payments made via salary sacrifice.