Child benefit threshold / increasing pension contributions

RickyB2000

blisteringblue wrote: »

And don't forget you need your P11D in work benefits too as this is added on as if it were earned income too.

Also it's a sliding scale from 50 - 60 K so you don't actually lose it all, you just pay back on next years tax code anything between.

Because of Private Healthcare and my company car I found I had to salary sacrifice close to 30% of my salary just to keep £80 a month of child benefits. Decided that wasn't worth the hit in wages so we just stopped the child benefit.

One good thing though from doing this, no more tax return.



1. Yes as long as you pay your pension by salary sacrifice.

2. Still claim it, you just have to fill in a tax return. Then pay back as a % via your tax code between the 50-60K sliding scale. Obviously over 60K and you get nothing.

I had the understanding any contribution to a pension reduced your net income. Not just through salary sacrifice.

Dazed_and_confused

Pension contributions vary a lot for tax purposes.

Some reduce salary so taxable salary is less, such as NHS or teachers.

Salary sacrifice is similar.

Personal pensions and SIPPs don't reduce income for the purposes of calculating your tax liability but they do reduce your net adjusted income which is beneficial for High Income Child Benefit Charge (and determining the amount of Personal Allowance due for higher earners).

blisteringblue

RickyB2000 wrote: »

I had the understanding any contribution to a pension reduced your net income. Not just through salary sacrifice.

Pass, I've always done salary sacrifice since company moved to DC Pension.

atush

We are married with one child.

Who is We? The non earning spouse should be claiming CB (not the hrtaxpayer) so they get Nics credited to them.

Kynthia

It's not your salary that needs to be below £50k to keep all of the child benefit, but your adjusted net income. See this link on how to calculate yiur adjusted net income and see what decreases and increases it.

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

Remember the non-worker or lower income parent should claim child benefit in their name in order to get the NI credit towards the state pension. I believe you can still claim the child benefit but then elect not to receive the money if youre sure your adjusted net income will be too high but still need the NI credit. The NI credit can be passed to a grandparent who assists with childcare if you don't need it and they do. It's saved my MIL paying a couple of thousand for incomplete NI years to increase her pension.

wacky75

My wife and I.

She is a lower earner in the 20% tax bracket, working part-time for the local school.

I thought that if one of a married couple was a higher tax bracket earner, that it deemed the CB something you couldn't claim between you.

xylophone

The non earning spouse

The OP's spouse is earning and may well be paying NI (or being credited) on her own account - she can check.

xylophone

I thought that if one of a married couple was a higher tax bracket earner, that it deemed the CB something you couldn't claim between you.

See here

https://revenuebenefits.org.uk/child-benefit/guidance/how-do-child-benefit-and-guardians-allowance-work/high-income-child-benefit-charge/

blisteringblue

wacky75 wrote: »

My wife and I.

She is a lower earner in the 20% tax bracket, working part-time for the local school.

I thought that if one of a married couple was a higher tax bracket earner, that it deemed the CB something you couldn't claim between you.

Pretty similar to ours, my wife does some term time work at a college and as a previous poster mentioned she was the one claiming the Child Benefit, but they still count your earnings in the calculation.

I know there must be a cut off but still grates that 2 earners could talk home 49K each so 98K per household and they still keep their Child Benefit, but Mrs BB takes home about 5K a year for spending money really and my salary loses all the benefit.

I did all the sums back then like you and just couldn't afford to give up 30% of my wage just to keep it.

My wife gets letters each year though telling her she does qualify for child benefit but we are declining it. Daughter turned 16 this year and got her National Insurance number still etc, so the NICs are there, but her work sometimes goes over NI threshold anyway so she does pay some NI.

wacky75

I'm going to be earning over 60k with bonus, so I will need to contribute 10k of that to the pension, which is what I would like to do but it does seem a lot for a gain of 1k in CB.

I agree, that is a poor way they have decided to base it on - should be on the combined earnings for sure..