Child Benefit & Tax Return

BlueMickey

Hi

I recently completed a self-assessment tax return for HMRC and have been given a bill of over £1600, which I really do not understand. I receive 84.60 every 4 weeks for one child, and have an annual salary of 57,000. My partner earns less (i.e. around 52k) so I complete the tax return. I pay pension contributions on my salary so my understanding is that gives some level of tax relief.

What I don't quite understand is how if HMRC have paid me around £1,097 over the course of the year, how they can expect over £1600 to be paid back. 

My salary changed from 52k to 57k in August 2020, but I am really stumped - any advice appreciated - currently on the phone to the tax man to work out what has gone wrong!

[Deleted User]

Did you enter your gross salary or salary after pension contributions (P60 figure)?

zagfles

Does the calculation not explain it? Could be you were on the wrong tax code etc. If you post the full calculation, also what tax code you were on at the end of the tax year, it could probably be explained.

BlueMickey

[Deleted User] said:

Did you enter your gross salary or salary after pension contributions (P60 figure)?

I took the salary from my P60

 zagfles said:

Does the calculation not explain it? Could be you were on the wrong tax code etc. If you post the full calculation, also what tax code you were on at the end of the tax year, it could probably be explained.

I've submitted it a couple of weeks ago now, so not sure how to access the calculation again. No answer from HMRC, been on the phone for 50 minutes

Just used the general calculator and it said I should owe £780, which again still seems high but more reasonable. I think I'll opt out going forward more hassle than its worth!

[Deleted User]

BlueMickey said:

[Deleted User] said:

Did you enter your gross salary or salary after pension contributions (P60 figure)?

I took the salary from my P60

 zagfles said:

Does the calculation not explain it? Could be you were on the wrong tax code etc. If you post the full calculation, also what tax code you were on at the end of the tax year, it could probably be explained.

I've submitted it a couple of weeks ago now, so not sure how to access the calculation again. No answer from HMRC, been on the phone for 50 minutes

Just used the general calculator and it said I should owe £780, which again still seems high but more reasonable. I think I'll opt out going forward more hassle than its worth!

Tax Return Options -choose year -  View your return - View calculation. 

BlueMickey

[Deleted User] said: BlueMickey said: [Deleted User] said: Did you enter your gross salary or salary after pension contributions (P60 figure)? I took the salary from my P60

 zagfles said: Does the calculation not explain it? Could be you were on the wrong tax code etc. If you post the full calculation, also what tax code you were on at the end of the tax year, it could probably be explained.
I've submitted it a couple of weeks ago now, so not sure how to access the calculation again. No answer from HMRC, been on the phone for 50 minutes

Just used the general calculator and it said I should owe £780, which again still seems high but more reasonable. I think I'll opt out going forward more hassle than its worth! Tax Return Options -choose year -  View your return - View calculation.  I have just amended with a P45 I had found (which has slightly different figures to my P60) and this has resulted in a decrease, but again this still seems way too much given that it's more than I've received.

Tax calculation

This section provides you with a breakdown of your full calculation. If it says your tax return is 100% complete then you have submitted your return and this is a copy of the information held on your official online Self Assessment tax account with HM Revenue and Customs.

Pay from all employments	£53,934.00
Total income received	£53,934.00

minus Personal Allowance

£12,500.00

Total income on which tax is due

£41,434.00   Amount Percentage Total Pay, pensions, profit etc. (UK rate for England and Northern Ireland) Basic rate £37,525.00 x 20% £7,505.00 Higher rate £3,909.00 x 40% £1,563.60 Total income on which tax has been charged £41,434.00 Income Tax due after allowances and reliefs       £9,068.60 Tax due on Gift Aid payments £25.00 x 20% £5.00 minus Remittance basis charge for non-domiciles £0.00 Gift Aid tax charge £0.00 plus High Income Child Benefit Charge £427.00 Income Tax due £9,495.60 Income Tax due after allowances and reliefs     £9,495.60 minus Tax deducted From all employments, UK pensions and state benefits £8,273.00 Total tax deducted £8,273.00 Total Income Tax due     £1,222.60 Estimated payment due by 31 January 2022 You must pay the total of any tax and class 4 NIC due for 2020-21 plus first payment on account due for 2021-22 by 31 January 2022 (Note: 2nd payment of £0.00 due 31 July 2022) This amount does not take into account any 2020-21 payments on account you may have already made 2020-21 balancing payment £1,222.60 Total due by 31 January 2022 £1,222.60

zagfles

You've paid too little PAYE tax. What was your tax code? Look at the tax code for last year on your account and how it was calculated. It looks like £2000 has been added to your "tax free amount" for some reason.

[Deleted User]

It appears that you have received approximately 1987 of extra personal allowance. What is the tax code from the P60 and why are the details different from the P45?

Maybe you have no idea but this seems the root of the issue.

Sorry - zagfles- crossed.

Dazed_and_C0nfused

I think you have slightly misunderstood the concept of Self Assessment, it isn't to collect the High Income Child Benefit Charge, it's go collect everything that is owed for the year, including any High Income Child Benefit Charge.

There's nothing unusual in owing tax at the end of the year, a tax code is just a provisional attempt to collect the correct amount of tax.  The Self Assessment return finalises the position for the year.

Or if could be you had some allowances/expenses in your tax code you have failed to include on your return which are still valid (Covid-19 WFH claim?) and should be included?

sheramber

from the tax calculation  

High Income Child Benefit Charge	£427.00

the rest of the charge due is for underpaid income tax on your employment income.

BlueMickey

Hi All,

Thanks for your help with this, been a hectic week so just catching up. A few things to come back on answers to questions:
Tax Code on P45 was 1250L
Tax Code on P60 is 1281L

I do WFH which I did claim for, in my naivety I just thought my salary each month would be adjusted. How should I include this on my tax return?

Another n00b question (apologies), how do I check which tax code I should be on?