Help with high income benefit charge and self assessment

EnterUserName

Hi,

Wondering if anyone who has been through the process could shed any light on where I’ve messed this up!

I’m claiming child benefit and earnings have crept marginally over £50k for the first time.

So I complete a self assessment online, basically contents of P60 and everything else “not entered”. HMRC tool indicated tax due of circa £80.

Receive bill for £18k or something daft.

Any ideas where I’ve bodged it all up? And more importantly how to fix it?

TIA
Mr squeaky bum :eek:

Dazed_and_confused

Fixing it will involve you making an amendment to your Self Assessment return. You should be able to do this online in a similar fashion to the original submission of the return.

But first you need to know what to amend.

Did you include the tax deducted by your employer (shown on your P60)?

If that isn't the problem you need to post the full tax calculation for anyone to help.

But to be honest I would have thought that it would stand out where the problem lies if you simply read through the calculation and consider each entry and think logically is it correct?

EnterUserName

I spoke with a very helpful lady at revenue and mentioned what you suggested. Turns out you were spot on. In my inexperience I had omitted the PAYE tax paid box

Anyway they were very helpful, sorted it all out with me and the £18k bill is now £70, which is much better

Thanks for your help

Ps anyone else finding this thread in future... just because it says ‘optional’ on the return doesn’t mean you can ignore it which I now know :rotfl:

xylophone

Had you considered paying more into your pension?

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

pappadruid

Hi All,

I have just spoken with HMRC regarding this as I am a smidge over the £50k threshold and need a little clarity over one point.

I have done the online calculator and have a question regarding the 'Salary before tax (with pension contributions deducted)' box.

I make contributions to my workplace pension (Local Authority) of £3k pa (not a private pension) which comes direct from my salary. As I read this box, I need to take my gross annual salary, deduct my pension contributions, and that is the figure used in the calculation. By doing this, it means I am under the threshold.

Speaking with HMRC, they said that this is incorrect and the workplace pension contributions should not be deducted and that only private pension contributions are to be deducted from the salary figure.

So, I am now confused, which is easily done! Why include 'with pension contributions deducted' in the box in the first place?

What I dont want to do is go through self assessment on the basis of someone at HMRC getting it wrong so thought I would ask you lovely people for clarity!

Thanks in advance!

calcotti

Fora local authority I would expect pension contributions to be deducted before tax is calculated. You will have a gross salary but your taxable income will be the amount after pension deductions. You should be able to use the taxable income figure on your P60.

Lindy24

Hi, I just wondered if you got anywhere with this. We are in the same position.
My husband has had earnings of over £50K but after taking into account his company pension scheme contributions he's only a tiny bit over £50k.
HMRC are saying the pension contributions aren't taken off and want almost all the child benefit back because they are using a much higher base salary. Everything on HMRC site says take off the pension cobtributions! We really don't know what to do now!

sheramber

If the pension payment are deducted from his salary before tax is deducted then his net taxable pay has been calculated after the payments have taken off. So you do not deduct them.If you did you would be claiming for them twice.

If he makes the pension payments from his net pay- i.e after tax has been deducted from his pay - then you would deduct them.

It would appear HMRC have been advised that his pension payments are deducted direct from his salary before income tax is deducted.

xylophone

Your husband's company pension scheme may well use "net pay" - this means that his pension contributions are deducted from his salary before tax.

https://www.nowpensions.com/help-centre/gateway/employee/general-information-gateway-help-centre/whats-the-difference-between-net-pay-and-relief-at-source

What is the figure shown in his P60 for "taxable pay"?

Is he permitted to make additional contributions to his occupational pension?

Dazed_and_confused

It would be helpful if you could post details from his month 12 payslip from March/early April 2018.

This should show any difference between his salary (irrelevant) and taxable pay (the bit that matters).

poppy10_2

Most public sector pensions are taken from gross pay and thus reduce taxable income.