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Child benefit and earning over £50k
pinkshoes
Posts: 20,660 Forumite
in Cutting tax
Mr Pinkshoes will soon be earning £53k.
We receive child benefit for 3 children.
My understanding is that he will need to do a tax return and pay back 30% of the yearly child benefit with this. Is this correct?
(I have looked online and the government webpage explaining it is really unclear and confusing me. I had originally assumed they would just pay us less child benefit!).
In addition to this, he "buys" £243 of childcare vouchers before tax. He also contributes about £250 a month into a pension which I think is also before tax.
So with the childcare vouchers and the pension contribution, does this mean he won't actually end up paying the 40% tax on any of his salary as this would put the taxable salary under £50k?!?!
I have Google searched various terms and still can't figure it out! Please help!
We receive child benefit for 3 children.
My understanding is that he will need to do a tax return and pay back 30% of the yearly child benefit with this. Is this correct?
(I have looked online and the government webpage explaining it is really unclear and confusing me. I had originally assumed they would just pay us less child benefit!).
In addition to this, he "buys" £243 of childcare vouchers before tax. He also contributes about £250 a month into a pension which I think is also before tax.
So with the childcare vouchers and the pension contribution, does this mean he won't actually end up paying the 40% tax on any of his salary as this would put the taxable salary under £50k?!?!
I have Google searched various terms and still can't figure it out! Please help!
Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)
0
Comments
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Before considering his adjusted net income, is his salary £53k before or after any pension contributions?1
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Pension will come off the the £53k, childcare vouchers probably will as well provided they are done as salary sacrifice.
Do try to keep his taxable pay under £50k, with child benefit for 3 children the amount he would get after tax for each £ earnt over £50k would be about 40p.1 -
before any contributions[Deleted User] said:Before considering his net statutory income, is his salary £53k before or after any pension contributions?Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
In short - he is not a higher rate taxpayer and fine for child benefit - but not by a huge amount! The childcare vouchers also reduce your adjusted net income.pinkshoes said:
before any contributionspurdyoaten2 said:Before considering his net statutory income, is his salary £53k before or after any pension contributions?
Good article here:
https://www.theguardian.com/society/2018/sep/01/high-earner-tax-penalty-child-benefit-50000-salary-pension1 -
Thank you! That makes it much clearer!Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0
![[Deleted User]](https://us-noi.v-cdn.net/6031891/uploads/defaultavatar/nFA7H6UNOO0N5.jpg)
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