What deductions can I use to avoid the High Income Child Benefit Tax Charge? AVC? Buying Holiday?

skipfeeney

Hi,

I have recently been hit with the High Income child benefit tax charge.   I have already got the following deductions on my pay slip (NHS worker), can anyone confirm if all these deductions already reduce my adjusted net income?  I am trying to work out if I put a little more in my AVC - Additional Pension it will bring me lower to avoid the charge.  I just need to be certain that the following is already taken into account so I can tweak my figures:

• Child Care Vouchers (the old style ones)

• Buying of Annual Leave

• NHS Pension Payments

• Additional Pension Payments (Prudential - AVC)

To confirm, all the above are on my payslip.

Thanks

Jeremy535897

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

skipfeeney

Ok so that says I can only take off Pension Contributions and Gift Aid Donations.  So the others must not count.  Thanks for the link.

skipfeeney

Whats a little confusing is articles elsewhere that state the following:

Another way to reduce your adjusted net income is to opt to have some of your salary paid in the form of childcare vouchers if your employer offers such a scheme.

You can take up to £55 a week of your wages as vouchers, on which you do not pay tax or national insurance. This will reduce your taxable income, but be aware that from 4 October, workplace childcare voucher schemes will close to new applicants.

I don't think that applies to me does it as I am getting paid and then buying Childcare vouchers?  Also this is not listed at all on the adjusted net income government website.

Jeremy535897

This addresses the childcare voucher point:
https://www.taxinsider.co.uk/child-benefit-clawback-how-to-avoid-it

zagfles

Clearly buying extra annual leave will reduce your taxable income and so your ANI. You're working less, so being paid less, so your income is less.