Child Benefit High Earner stopping payments

TigerBear2604

Hoping I can find an answer here as struggling to find it anywhere else. I've recently reached the earnings limit which means that the Child Benefit we get is completely cancelled out by the extra tax. I understand we just opt to not receive the payments anymore which is the simple part, but what happens to the additional tax? How long does that continue to go for. Self Assessment always appears to be for the previous Tax Year, but if we stop receiving the payments (2 Children) we'll be over £150 worse off a month for getting on for 2 years. Anyone done this and know what actually happens? Thanks in advance

[Deleted User]

Really don’t understand where you are coming from? If you cancel the child benefit where is the extra tax?

Dazed_and_C0nfused

You pay the High Income Child Benefit Charge on what was received, not what hasn't been received.

sheramber

if your income for 2022/23 means you  need to repay your child benefit payments- note it is not tax it is repaying the payments you have received-  you need to advise HMRC and register for a self assessment tax return , if you do not already complete one.

Any charge due from your 22/23 tax return will be payable by 31 January 2024. 

The return or notice to file is sent out from 6 April. the sooner you submit the completed return, the sooner you will know what you need to pay  by 31 January.

If you cancel the payments before 6 April 2023 then there will not be any charge due 2023/24.

p00hsticks

Also if the other parent is not earning enough to get NI credits through employment and the children are under 12, then make sure that they are still registered to get the NI credits to help with their State Pension, even if you decline the money

TigerBear2604

Thanks so far for the replies, still not fully understanding and perhaps my explanation was not the best.

I have been completing the Self Assessment over the last few years due to the child benefit earning over 50k. The Self assessment I have completed as I understand was for Tax year 21/22. I choose to pay the additional payment out of the monthly earnings rather than a lump sum, hence the tax code change which takes this from hence the additional tax I pay.

So what I am thinking is, I will complete my Self Assessment through this year but that will be for tax year 22/23, where we were still receiving the child benefit payments, so will still need to pay this back (As I will through the current year). As much as I would like to have a lump some to just pay that back we don't, so it comes out each month. Which means that I'll pay that through this year and next, but we will not have received any child benefit for nearly 2 years. Hoping that makes sense?

Its a very annoying tax as our combined income is very much less than a couple how both earn £45k per year and can receive the full child benefit without any penalty. 

Jeremy535897

You are receiving child benefit, and paying tax on it later. That is to your advantage. If you got extra salary instead the tax would be paid as you earned it.

sheramber

TigerBear2604 said:

Thanks so far for the replies, still not fully understanding and perhaps my explanation was not the best.

I have been completing the Self Assessment over the last few years due to the child benefit earning over 50k. The Self assessment I have completed as I understand was for Tax year 21/22. I choose to pay the additional payment out of the monthly earnings rather than a lump sum, hence the tax code change which takes this from hence the additional tax I pay.

So what I am thinking is, I will complete my Self Assessment through this year but that will be for tax year 22/23, where we were still receiving the child benefit payments, so will still need to pay this back (As I will through the current year). As much as I would like to have a lump some to just pay that back we don't, so it comes out each month. Which means that I'll pay that through this year and next, but we will not have received any child benefit for nearly 2 years. Hoping that makes sense?

Its a very annoying tax as our combined income is very much less than a couple how both earn £45k per year and can receive the full child benefit without any penalty. 

it is your choice not to pay by 31 January and delay payment to the following year.

The consequence of that is that you are paying back although you are not receiving the payments.

In effect you have an interest free loan that you are paying back.