Please help with this Child Benefit Charge situation

FlashBarry

Hi all,

Please could I get your help on this situation?  I'm reading into this higher income child benefit charge and I'm having a panic attack!  I have 2 kids which I claim child benefit for.  I've never completed a tax return.  I've seen this thing about earning over £50k and always thought it didn't apply to me but I'm not sure now!

I'm in a PAYE job and my wage has been around £42k for the last few years.  Since Jan 2021 I have started getting a performance related bonus around £10k/year with payments spread monthly (around £1k a month).  I also salary sacrifice 10% of my wage into my pension.  No other (non ISA) investment or income.

Wage £42k
Bonus £10k
-pension salary sacrifice £4k
= £48k.  Below the threshold, right?

HOWEVER, I also have a company car with a BIK of £7k.

Do I need to add this £7k onto my £48k income?  Is my taxable income therefore £55k?

Do I need to complete a tax return?

Any advice appreciated.

Dazed_and_C0nfused

The £7k is income for tax (and HICBC) purposes.

What do you expect your 2021:22 P60 and P11D to show income/benefit wise?

What did you 2020:21 P60 and P11D show income/benefit wide?

What other taxable income do you have?  For example savings interest or dividends.

FlashBarry

I found my P60 from last year.  
In the box that shows "Pay and income tax details" is shows a value of £49,300.
Is that my total figure including car BIK and everything, or do I need to add the £7k BIK on top of that?
No other income or dividends other than ISAs.

Jeremy535897

If the £49,300 is your actual cash pay (less salary sacrifice), the £7,000 has to be added on. You will need to complete a tax return and the HICBC will apply.

Presumably your notice of coding reflects the benefit in kind?

FlashBarry

Yes the tax code reflects the car BIK.
Another question - it looks like the tax relief from my sacrifice is NOT added to my pension pot.  Can I somehow get access to this tax relief, or do I need to try and convince the employer to add this in to the pension?  

Dazed_and_C0nfused

There is no tax relief on salary sacrifice pension contributions as they are employer contributions.

You personally save tax and NI by not having the income to be taxed in the first place but there is no pension tax relief.

And you cannot now take these contribution into account when calculating any High Income Child Benefit Charge as they have already been taken into account in arriving at your taxable pay of £48k

Jeremy535897

If your benefit in kind is exactly £7,000, your income for HICBC would appear to be £56,300. This site tells you how to calculate the HICBC:
https://www.gov.uk/child-benefit-tax-calculator