Child Benefit and adjusted net income

dulcies

Hi all,
I have tried to search this but there seems very mixed responses. The situation is as follows - my husband has just got a new job and annual gross salary is £60100. We have 2 children currently but due a third any moment. We currently claim child benefit and on his current salary we don't have to pay any tax back on it however on the new salary I think we will but it is based on adjusted net income and this is where I am confused.
Gross salary is £60100
He pays pension contributions of 8% per month (£400 per month or £4808 p a)
He is also part of the old (pre 2018) child care voucher scheme and pays £243 a month (£2916 per annum)

The above payments are listed on his pay check as 'payments' so there is salary which is +£xxx then childcare vouchers -243 and pension -349.26

So am I right in thinking to get the adjusted net income I minus the pension contributions and child care vouchers from his gross salary? This would give an adjusted net income of £52376. For the child benefit he will need to do a self assessment and we will pay the tax back on amount over £50k.

Thanks for any help on this - I have been going round in circles!

Dazed_and_C0nfused

Salary is generally irrelevant.

What does his March  payslip show his taxable pay as?

Are how pension contributions net pay, relief at source or salary sacrifice?

dulcies

He isn't in the new role yet so his salary is different (he starts 1st May but is with the same employer)

I haven't got his March payslip here but his February one (annual salary is 52389) says 
Gross pay: 3773.49
Net pay: 2871.31

in the payments section it has 3 lines
salary £4365.75
Child care vouchers -£243
SalEx PenSch ST Ees -£349.26

then deducations are
NI £357.18
PAYE £545

Does that make any sense?

Dazed_and_C0nfused

Doesn't it have cumulative year to date figures?

dulcies

Yes
Gross to date 41508
gross taxable to date 41508
tax paid to date 5995
employee NI to date 3928
employer NI to date 4609
employer pension to date 7683

Dazed_and_C0nfused

gross taxable to date 41508

That's only £45,281 per year, not £52,389 so it looks like the amounts sacrificed for child care vouchers and extra employers pension contributions have already been deducted.

So your starting point for ANI is £45,281, not £52,389 and you cannot deduct the salary sacrifice elements.

Just apply the same logic to the new job, remembering for 2022/23 it will (presumably) be 1/12th at the old pay and 11/12ths the new pay.

With three children extra pension contributions can be incredibly tax efficient as they can avoid 40% tax and reduce the HICBC payable.

dulcies

Reigniting this as I now have some accurate figures from this tax year....

so end april pay gross salary £54825 deductions child care vouchers £243 and pension £365.50
end May pay gross salary £60,308 deductions £243 child care vouchers £402.05 pension
end June pay gross salary £63323 deductions £243 child care vouchers £422.15 pension
July, August Sep are the same as June. Rest of the tax year will be the same as June

We have 3 children. 2 children claim for the whole tax year and 1 child claim from May. We get £202 per month child benefit. 

Just trying to work out how much (if any) we will need to pay back at the end of the tax year? Can anyone help?

Not sure if it is just pension that is an allowable reduction to the salary and thus pension over the year would be £4987.55 taking salary down to £58,335 - in which case I think we will owe quite a bit back? Or if it includes child care vouchers as well then it would be £7903.55 £55419.

The child care vouchers are listed in the 'payments' section of his pay slip. 

I'm jsut still trying to determine if child care vouchers count towards adjusted net income or not? 

Sorry for reigniting this (i'm sleep deprived with a small baby) and trying to make sure we don't get into a pickle with finances whilst i'm on maternity leave!

Dazed_and_C0nfused

Do your payslips have a cumulative taxable pay value?

We get £202 per month child benefit. 

Are you sure about that?  Child Benefit is due on a weekly basis so it's much more likely you are paid £202 every 4 weeks not every month.

dulcies

Sorry yes you are correct £202 every 4 weeks

Cornish_mum

Hi we had similar issues a few years ago so you have my great sympathy; one’s first dealings with HMRC can be extremely baffling.

These are useful websites for the info you need. https://www.gov.uk/child-benefit-tax-charge and https://www.gov.uk/child-benefit-tax-calculator. If in doubt ring HMRC for advice. They are very helpful especially if you are new to the whole thing. I would recommend your DH sets up a government gateway account (if he doesn’t have one) and via this, a personal tax https://www.gov.uk/personal-tax-account; as this will give you quite a lot of the info you need rather than trying to tot up payslips etc. 

In our case DHs salary sacrifice workplace based childcare scheme counted like a company car towards his adjusted net income. However my old scheme childcare vouchers did not count towards mine. But I would recommend you calling HMRC to confirm this. 

Best of luck CM

dulcies

Cornish_mum said:

Hi we had similar issues a few years ago so you have my great sympathy; one’s first dealings with HMRC can be extremely baffling.

These are useful websites for the info you need. https://www.gov.uk/child-benefit-tax-charge and https://www.gov.uk/child-benefit-tax-calculator. If in doubt ring HMRC for advice. They are very helpful especially if you are new to the whole thing. I would recommend your DH sets up a government gateway account (if he doesn’t have one) and via this, a personal tax https://www.gov.uk/personal-tax-account; as this will give you quite a lot of the info you need rather than trying to tot up payslips etc. 

In our case DHs salary sacrifice workplace based childcare scheme counted like a company car towards his adjusted net income. However my old scheme childcare vouchers did not count towards mine. But I would recommend you calling HMRC to confirm this. 

Best of luck CM

Thanks for this. These are the old style childcare vouchers so hopefully they are like your old scheme. I will call HMRC