Help with child benefit repayment

Lemily14

Hi guys,

So needing some idiot proof advice here if possible. My earnings this year are probably going to be about £62,000 which is higher than usual, meaning I’ll have to pay back my full child benefit payment that I received. Someone said that if I phone up my pension company and make a one off payment then I can claim money back somehow, tax relief or something? Is this true and can some one explain it to someone that has no clue on these things.

Thanks

Dazed_and_confused

Can you give us an idea of how much you wanted to hand over tot the pension company?

And do you mean a personal pension, stakeholder or SIPP?

Or your employers pension scheme?

Lemily14

Hi, I was thinking about £3000 and it would be into my employers pension scheme

Dazed_and_confused

Ok, so how would you making this payment?

You need to understand what type of contribution it will be to then know the tax benefits.

Common situations are

Net pay
Gross lump sum with no automatic tax relief
Relief at source

And of course salary sacrifice but if it's that you've misunderstood a few things.

Lemily14

So I’ve got the money sitting In a savings account and I wouldn’t miss it to be honest

xylophone

https://adviser.royallondon.com/technical-central/pensions/state-benefits-pension-manuals/child-benefit-avoiding-the-tax-charge/

https://forums.moneysavingexpert.com/discussion/comment/76458704#Comment_76458704

might help.

Dazed_and_confused

It's the type of contribution that's important.

Until you tell us what that is it's impossible to explain the tax benefits.

Lemily14

I don’t know what you mean by ‘type of contribution’, as i said, I’m pretty clueless to this stuff, unfortunately. All I know is that my earnings this year will be above £60000 come the end of the tax year which puts me over the child benefit limit so I’ll have to pay back about £1800 in child benefit. Was just looking for a way to counter this if possible and someone suggested paying money into my pension, from my savings as I can claim higher rate tax back on the amount, or something like that. If anyone had any ideas on how to counter me having to pay this £1800 then that would be very helpful, thanks guys

Dazed_and_confused

In your original post you said

Someone said that if I phone up my pension company and make a one off payment then I can claim money back somehow, tax relief or something? Is this true and can some one explain it to someone that has no clue on these things.

Pensions contributions will ultimately reduce your "adjusted net income" which is what the High Income Child Benefit Charge is based on.

If you make a large enough contribution you could get to keep all of the Child Benefit. But you could pay a small amount and keep none of it.

It is impossible to explain the full benefits without knowing what type of pension contribution you will be making as they all work slightly differently.

Find that out and we can help with more of an explanation.

It would be useful to know what other taxable income you expect to have in the current year over and above the £62k mentioned in your original post, for example untaxed interest.