Paying back Child Benefit after going over £60k taxable income

ender4

Hi, 

Last tax year i was earning just under £50k taxable income and that was my estimated taxable income for this year. I have received a large pay-rise which means this year i will now end up above £60k taxable income after my final PAYE payment in March 2024.

My wife has filled in the form to opt out of receiving child benefit. However, she had already received the April payment by the time the form was submitted.  

Does that mean we have to pay that child benefit back to HMRC? Or as my taxable income at that point was still predicted to be under £50k then it was due to us that month?
Do we need to notify HMRC? Or will they contact me automatically?

PS - I don't want to lower my taxable income any further by putting more into my pension as i want the actual cash this tax year.

MattMattMattUK

ender4 said:

Hi, 

Last tax year i was earning just under £50k taxable income and that was my estimated taxable income for this year. I have received a large pay-rise which means this year i will now end up above £60k taxable income after my final PAYE payment in March 2024.

My wife has filled in the form to opt out of receiving child benefit. However, she had already received the April payment by the time the form was submitted.  

Does that mean we have to pay that child benefit back to HMRC? Or as my taxable income at that point was still predicted to be under £50k then it was due to us that month?
Do we need to notify HMRC? Or will they contact me automatically?

PS - I don't want to lower my taxable income any further by putting more into my pension as i want the actual cash this tax year.

You will have to pay back the April payment as it is in the 2023-2024 tax year, you need to be proactive in telling HMRC and making the repayment. 
https://www.gov.uk/child-benefit-tax-charge

Does your wife also work? If not or if she does not earn enough to pay NI then there are benefits to her claiming the Child Benefit and then you repaying. 

calcotti

ender4 said:

My wife has filled in the form to opt out of receiving child benefit. However, she had already received the April payment by the time the form was submitted.  

To clarity. If your wife is not getting NI credits through another route then she could maintain the CB claim if a child below age 12. That way she continues to get the NI credits. She can opt out of receiving the payments without closing the CB claim. (I realise that this may be exactly what you are referring to and I have posted for the avoidance of doubt.)

MattMattMattUK said:
Does your wife also work? If not or if she does not earn enough to pay NI then there are benefits to her claiming the Child Benefit and then you repaying. 

It is simpler to decline the payment which then avoids the need for a tax return but can nonetheless maintain the claim.

MattMattMattUK

calcotti said:

ender4 said:

My wife has filled in the form to opt out of receiving child benefit. However, she had already received the April payment by the time the form was submitted.  

To clarity. If your wife is not getting NI credits through another route then she could maintain the CB claim if a child below age 12. That way she continues to get the NI credits. She can opt out of receiving the payments without closing the CB claim. (I realise that this may be exactly what you are referring to and I have posted for the avoidance of doubt.)

MattMattMattUK said:
Does your wife also work? If not or if she does not earn enough to pay NI then there are benefits to her claiming the Child Benefit and then you repaying. 

It is simpler to decline the payment which then avoids the need for a tax return but can nonetheless maintain the claim.

Having done tax returns for the last 12 years for one reason or another I sometimes forget that not everyone does them by default, though they are pretty simple so I do not think people should be as nervous of them as they seem to be.