Child Benefit

Housej21

Hi all

Me and my partner are due to have our first baby in December 23. We are going to be claiming child benefit. I currently earn £54k per year which means we aren’t entitled to the whole benefit amount and only a percentage of it.

Our question is, will we receive the full benefit amount and then have to pay a lump sum back at the end of the financial year or will my personal tax allowance get reduced to pay back what we owe?

Any help is greatly appreciated 

Dazed_and_C0nfused

Housej21 said:

Hi all

Me and my partner are due to have our first baby in December 23. We are going to be claiming child benefit. I currently earn £54k per year which means we aren’t entitled to the whole benefit amount and only a percentage of it.

Our question is, will we receive the full benefit amount and then have to pay a lump sum back at the end of the financial year or will my personal tax allowance get reduced to pay back what we owe?

Any help is greatly appreciated 

The choice is yours.  You can update HMRC shortly after the birth and pay something during the year.

However this doesn't prevent the need for your to complete a Self Assessment return and it is this that finalises any extra tax due or overpayment.

Also, it is your adjusted net income which determines the High Income Child Benefit Charge so it is entirely possible for you to earn £54k but not have anything to pay back as certain pension contributions reduce ANI.

Do you get money into your pension using net pay, relief at source or salary sacrifice?

And don't forget, all taxable income contributes towards adjusted net income.

Housej21

Hiya

Thanks for this. My pension is deducted from my gross pay and then that sum is subject to tax/deductions which leaves my net pay total. So I think my pension is taken out before tax

Dazed_and_C0nfused

Housej21 said:

Hiya

Thanks for this. My pension is deducted from my gross pay and then that sum is subject to tax/deductions which leaves my net pay total. So I think my pension is taken out before tax

That makes life easier is you immediately get the maximum tax benefit and don't include anything for it on your tax return as your P60 will already reflect the rescued taxable income.

For example if your salary is £60k and you contribute 10% then your P60 will show £54k taxable income.

Housej21

Hi

Thanks for all your help with this!!
very much appreciated