Self Assessment - £50,000 while receiving child benefit

RealWelshWizard

I have read that if you earn over £50k in a tax year and wish to continue receiving child benefit, you must complete a self assessment each each. Is this £50k based on NIable pay or Taxable pay? When I look on my Gov.Uk login, it gives my running total as 'taxable Income' based on my PAYE - yet on my payslips there is also a Niable total - which is higher than the taxable figure. 
Confused in the difference and then which would be used top determine if i need to complete a self assessment for 2020 - 2021. Any advice greatly appreciated. 

[Deleted User]

Sounds like you are paying pension contributions. Is the difference close to your pension contributions to date figure?

The cut off is based on an adjusted net income figure of £50000. 

It it would not be the NIable figure in that case. 

(Can you delete your post on the other thread?}

CPUK81

Hello, 

[Deleted User] said:

Sounds like you are paying pension contributions. Is the difference close to your pension contributions to date figure?

The cut off is based on an adjusted net income figure of £50000. 

It it would not be the NIable figure in that case. 

Can you explain please? I have the same problem and it’s way over my head. 

I pay into my pension as salary sacrifice so my gross salary shows lower than 50k but if I include what I paid in pension it would be over. The calculator on HMRC page confuses me as it says that I should  include pension contributions. 

The other question is (if pension is not included) could I increase my pension to lower my salary to avoid paying this tax charge?
thank you. 

Dazed_and_C0nfused

I pay into my pension as salary sacrifice

No you don't.

You are agreeing to a lower salary in return for your employer contributing more to your pension.  That is why there is no pension tax relief with salary sacrifice contributions.  Because they are employer contributions.

You should include pension contributions but as you haven't paid any there is none to include.

If you included them in this situation you would be double counting them.  For example,

Salary £55,000 less £5,500 sacrificed = taxable pay (P60 amount) of £49,500.

If you deducted the £5,500 again you would end up at £44,000 which is wrong.

RealWelshWizard

Dazed_and_C0nfused said:

I pay into my pension as salary sacrifice

No you don't.

You are agreeing to a lower salary in return for your employer contributing more to your pension.  That is why there is no pension tax relief with salary sacrifice contributions.  Because they are employer contributions.

You should include pension contributions but as you haven't paid any there is none to include.

If you included them in this situation you would be double counting them.  For example,

Salary £55,000 less £5,500 sacrificed = taxable pay (P60 amount) of £49,500.

If you deducted the £5,500 again you would end up at £44,000 which is wrong.

so you would go from the figure off your p60 total to see if you went over the £50k?

Dazed_and_C0nfused

That is the starting point yes but adjusted net income, which determines the HICBC is more than just earnings.

Have a read of this,

https://www.gov.uk/guidance/adjusted-net-income

RealWelshWizard

Dazed_and_C0nfused said:

That is the starting point yes but adjusted net income, which determines the HICBC is more than just earnings.

Have a read of this,

https://www.gov.uk/guidance/adjusted-net-income

thank you. do HMRC let you know if you need to complete a self assessment - currently paid PAYE

Dazed_and_C0nfused

Yes however if you think you are liable it is always better to come forward first as you will often get longer to complete the return and have the option of paying anything owed back though your future tax code.
If HMRC come after you it tends to be a bit after the event and you could be liable to penalties or interest charges.

RealWelshWizard

purdyoaten2 said:

Sounds like you are paying pension contributions. Is the difference close to your pension contributions to date figure?

The cut off is based on an adjusted net income figure of £50000. 

It it would not be the NIable figure in that case. 

(Can you delete your post on the other thread?}

When I look, my employer pension contributions year to date, is the exact difference between 'Niable pay to date' and 'Taxable pay to date'. So you must have to pay NI on the employer contribution but not tax? 

Dazed_and_C0nfused

Do you mean employee contributions?

It sounds like a net pay pension scheme but employer contributions wouldn't make a difference.