redundancy payment and child benefit

katdmcdougal

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? 

unkle

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?

katdmcdougal

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

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.

katdmcdougal

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

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.

katdmcdougal

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!!

Dazed_and_C0nfused

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)

katdmcdougal

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

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.