High Income Child Benefit Charge

Nathaniel_Essex

Hi all

I got a letter through the post about the above. For 2017/18, I started on a salary of £48k but had bonuses taking it beyond £60k. When I signed up for child benefits, it was my first time doing so and I simply forgot about the threshold/was not even aware when I broke it. Anyway, ignorance is no excuse.

The letter simply states that I should go online and check whether I need to do a self assessment or not. I am curious to if this is one of those things I can bury my head with and get lucky or should I just do the form online? Also, if I do need to pay it back, do I need to pay back everything or just the periods and went over the threshold and are there any other loopoles tha may help?

Dazed_and_confused

You really think HMRC have gone to the trouble of pointing you in the right direction and will then ignore it if you don't comply?

High Income Child Benefit Charge is not based on salary, it is adjusted net income which matters and this may be much less (or more).

You may have a salary of £60k but pay 10% pension contribution which means your taxable pay is only £54k. And it is taxable pay (P60 figure) which is part of the adjusted net income calculation, not salary.

If you file your 2017:18 self assessment return by 30 December it may be possible for anything due to be collected via a lower tax code for the 2019:20 tax year i.e. the amount due is taken over 12 months from April 2019 pay packet through to March 2020 (this is assuming you owe less than £3k and are still earning similar amounts).

Google adjusted net income and there is lots of information available, gift aid payments and personal pension contributions are two common things which help reduce your adjusted net income. And you could be due some additional tax relief as a higher rate payer.

All this comes out in the wash through your Self Assessment return.

Nathaniel_Essex

Thanks. I have done my self assessment. Looks like I went over the limit in my February pay slip.

Does this mean I have to pay back 3 months worth of child benefit or the entire thing?

[Deleted User]

Not sure how February is relevant.

Your entitlement to child benefit for the whole of 2017/18 tax year will be based on your adjusted net income for the whole of 2017/18 tax year. What is that figure from the self-assessment that you have completed?