First self assessment due to High Income Child Benefit Charge

impaul

Hi all,

I'm completing my first self-assessment for 2020-21 because for the first time my salary has just gone over £50K, not by a huge amount, so with two children was expecting a charge of about £350 as part of the High Income Child Benefit Charge.

My tax is usually straight forward as I'm PAYE and I have been all my working life, so I was surprised when the Tax calculation came back as me owing £1130 (£350 of which was the HICBC). Is it likely that the rest of the £780 is just down to me slipping into the higher rate tax bracket for the first time, and HMRC wrongly estimating/calculating my tax for that year? The £780 figure does pretty much match the amount indicated on the calculation as being due at the higher rate.

If that's the case should they not have adjusted my tax code for this year to recoup the underpaid tax for last year?

Thanks.

Dazed_and_C0nfused

Before you go any further you need to remember a couple of things,

1.  Your tax code is only provisional, your actual tax liability is established after the end of the year, either by HMRC calculating it or by completing a Self Assessment return.

2.  The Self Assessment calculation is only as good as the data entered.

Have you compared your tax code for 2020:21 with the details you have included on the return?  

The discrepancy could be because you had something in your tax code you were no longer eligible for i.e. job expenses or pension relief.  Or they were in your code and they are still valid but you have failed to include them on the return.

A bit more detail is needed to pinpoint the exact issue here.

Don't forget you must file by 30 December if you want to avoid paying the amount due direct to HMRC (the other option being to have it collected via your 2022:23 tax code).

[Deleted User]

Did you enter the pay and tax details from your p60 as opposed to the gross pay to date indicated on the final payslip? 

Some enter the latter which can account for the discrepancy.

impaul

impaul said:

Hi all,

I'm completing my first self-assessment for 2020-21 because for the first time my salary has just gone over £50K, not by a huge amount, so with two children was expecting a charge of about £350 as part of the High Income Child Benefit Charge.

My tax is usually straight forward as I'm PAYE and I have been all my working life, so I was surprised when the Tax calculation came back as me owing £1130 (£350 of which was the HICBC). Is it likely that the rest of the £780 is just down to me slipping into the higher rate tax bracket for the first time, and HMRC wrongly estimating/calculating my tax for that year? The £780 figure does pretty much match the amount indicated on the calculation as being due at the higher rate.

If that's the case should they not have adjusted my tax code for this year to recoup the underpaid tax for last year?

Thanks.

Thanks. Having looked at my tax codes they have varied for the last couple of years so I expect this has something to do with it. Perhaps because I'm claiming less mileage than I have in previous years. I'll investigate more closely after Xmas!

impaul

[Deleted User] said:

Did you enter the pay and tax details from your p60 as opposed to the gross pay to date indicated on the final payslip? 

Some enter the latter which can account for the discrepancy.

Thanks, yes the details were from my p60. Looks like it might be something to do with my tax code which isn't the standard code. Need to work out why!

Dazed_and_C0nfused

impaul said:

impaul said:

Hi all,

I'm completing my first self-assessment for 2020-21 because for the first time my salary has just gone over £50K, not by a huge amount, so with two children was expecting a charge of about £350 as part of the High Income Child Benefit Charge.

My tax is usually straight forward as I'm PAYE and I have been all my working life, so I was surprised when the Tax calculation came back as me owing £1130 (£350 of which was the HICBC). Is it likely that the rest of the £780 is just down to me slipping into the higher rate tax bracket for the first time, and HMRC wrongly estimating/calculating my tax for that year? The £780 figure does pretty much match the amount indicated on the calculation as being due at the higher rate.

If that's the case should they not have adjusted my tax code for this year to recoup the underpaid tax for last year?

Thanks.

Thanks. Having looked at my tax codes they have varied for the last couple of years so I expect this has something to do with it. Perhaps because I'm claiming less mileage than I have in previous years. I'll investigate more closely after Xmas!

That's quite plausible.  Your Self Assessment return is putting things right for 2020:21.