redundancy payment and child benefit

Someone may be able to help me but I am assuming I already know the answer! When I was made redundant I was paid my notice in lieu, my holiday pay and statutory redundancy (circa £2k). As I have been lucky in getting a new job sorted (although slightly less wages but nevermind - its a good job and stable!) I am technically getting paid again before my 'payment in lieu of notice' runs out. So, for the year, I will have 'earned' more than my annual salary normally is (circa 40k) with the tacked on lump sum. 
Am i going to have to pay the child benefit back in full? i am assuming so, as i'll have earned a higher salary than normal which takes me over 50k. Wont apply next year as i'll be back under 50k by a happy margin but just preparing myself for a letter from HMRC demanding a four figure sum from me? 

Comments

  • unkle
    unkle Posts: 338
    Name Dropper First Post First Anniversary Combo Breaker
    Forumite
    Yes if you earnings for the year are more than 50k the CB starts to reduce, £60k disappears. Could you not make more payments into pension to reduce to just below 50k?
  • thanks for your reply, not really in a position to move too much money around, from the PILON though I have ear marked off a bit to reply CB in-case its in full and will just leave it. I've overpaid quite a bit of tax as it was a lump sum too so hoping as my new job starts paying me I may get some of that back before tax year end - i'll squirrel that away too! 

    Just want to be prepared, I am currently pregnant and losing job/switching means I dont qualify for work paid stat or enhanced maternity leave (only maternity allowance from the government) so need a savings pot ready for baby's arrival next year. Whilst maternity allowance is clearly not to be snubbed at, its about a 6th of my take home wage usually would be and im the main earner so hard planning is called for!
  • daveyjp
    daveyjp Posts: 12,388
    First Post Name Dropper First Anniversary
    Forumite
    I wouldn't wait for a letter, as you are aware of the matter do your own tax return. For this financial year the deadline for submitting a return is 31 January 2022.
  • i have no reason to complete a tax return usually - so im not registering and filling out all that if not required (unless im also due part of my tax rebate still by year end - i think it unlikely as there's a few pay periods to go before than and hopefully it sorts itself out at new jobs PAYE system). 
    I'll give them a call. I dont want to stop it, as come next year my income certainly wont be above as ill be on mat leave/break for part of the year, plus i'll have two children!
  • daveyjp
    daveyjp Posts: 12,388
    First Post Name Dropper First Anniversary
    Forumite
    You don't usually, but once you go over £50k and receive CB things get more complicated.  By doing it yourself you know it is correct.
  • I see your point, I actually work in tax for a living so its not a hard thing to do - I just did not really want to be stuck in the SA system just for one year! I may try calling and making a manual payment if they allow me, if not I'll complete one. thanks though, mainly a sense check and helping me work out what I need over the next year financially as doing with it with a newborn would just be making it harder for myself!!
  • There are only two ways to pay the High Income Child Benefit Charge.

    1).  Register for Self Assessment and complete a return for the year(s) in question

    2).  Don't register and wait for HMRC to come calling.  At which point you will be charged interest for late payment (and possibly penalties)
  • I mean, on their website there is a number to call in year if you know you'll go over to discuss options and it also gives payment details sooooooo I think there's a third. If that third is 'call them and they'll send you a tax return' then fine, so be it. 
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,759
    First Anniversary First Post Name Dropper
    Forumite
    edited 21 September 2020 at 9:33AM
    Pay the tax charge
    Who pays the tax charge
    If your partner’s income is also over £50,000 but yours is higher, you’re responsible for paying the tax charge.
    ‘Partner’ means someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.
    Register for Self Assessment
    You need to fill in a Self Assessment tax return each tax year and pay what you owe.
    If you do not usually send a tax return, you need to register by 5 October following the tax year you need to pay the tax charge.

Meet your Ambassadors

Categories

  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.2K Spending & Discounts
  • 233.9K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards