Child Benefit Over Paid? £50000 Earner

Moneybox

Please can someone advise what I need to do. Have only been told today by a friend to research this as they received a letter and shocked to learn we may also have been over paid?

It was originally applied for at birth 2006. Second child 2011. About 4 years ago salary went just over £50000. My husband earns below. 

It continued to be paid into joint bank account but understand today that as my salary is just over £50000 I may have been over paid and will have to repay 😱. I am confused however reading posts about net pay and if it is a factor that my pension contributions bring my pay below £50000?

What should we do first?
Could someone post who I should contact and what actions we need to follow to correct. Can we do this online?

Thank you.

sammyjammy

When you say just over £50k how much?  If you pay into a pension out of your salary you can deduct this, its only at 60k that you would owe the whole amount back so don't worry about it too much.  Did you ever get a letter from HMRC?

Moneybox

No letter but a friend had one and explained it so we have panicked as didn’t know. We didn’t think it was means tested.

54000 for 3 years
52000 for 1 year

This is before paying pension contributions which bring it down close or below 50000.

That was my earning as I had originally claimed however my husband is about £20000. Do we take that into account?

Last year and this year I paid extra into the Nest pension I was provided bringing me definitely under 50000. But I did get tax back on our pension contributions paid at the higher rate. The Nest Pension / Employer makes what ever adjustments they do I understood at the basic rate.

I am worrying a bit. I don’t know what I have to do next or what we may need to pay and how quickly.

400ixl

It is only if one salary is above the threshold, not a household income.

How does your pension contribution get made, is it salary sacrifice?

Do you already do self assessment?

Moneybox

The pension is salary sacrifice. 

Employment 1
3 Years teacher pension when I was on about £54000.
Employment 2
1 Year (I am in my second now) in a Nest Pension, Salary Sacrifice but I pay an extra £400 to Nest via Direct Debit.

We never have had to do a self assessment as both of us have tax / ni and pension contribution taken out of our pay packets arranged by employer.

I did write a template letter to claim back the higher tax paid on my pension contribution extra contribution (£400 a month). Nest explained I had to do this as they only claim for the basic rate? I provided all the information and had a cheque for about £300 sent to me for 2 years (I had moved to my new employer part way through the financial year). Never really understood how or why.

Thanks so much for your help. I am trying to get hold of citizen advice but that’s impossible. We obviously want to correct asap but not sure what to do first.

daveyjp

The easiest way is to get all your P60s and check if your salary was over £50,000.  If in any years it is you can do HMRC self assessments.

sammyjammy

Not really clear, do you have two jobs?  So in your teaching position you earn £54k gross?  If your pension contributions are more than £4000 a year then you are ok, can't comment on your Employment 2 as I am unsure what you mean, if this is a second employment you need to add that salary on.

sheramber

The child bebefit charge is based on your NET ADJUSTED INCOME.

There is a calculator here

https://www.gov.uk/child-benefit-tax-charge

For salary figure you use the figure  shown on your P60- which will be after the salary sacrifice. for your pension payments.

No ddurther adjustment is needed for pension payments.

Dazed_and_C0nfused

Also I would check the method used to get money into your pension.

Salary sacrifice, which cannot be deducted when calculating your adjusted net income, would be unusual for a teacher.

More likely it would be net pay, again these contributions cannot be deducted when calculating your adjusted net income.

Relief at source contributions (where the pension company adds 25% to your contribution) do get taken into account.

NB.  Salary sacrifice are employer contributions so cannot be deducted and net pay are already taken into account on your P60 so deducting them would be double counting. 

Moneybox

sammyjammy said:

Not really clear, do you have two jobs?  So in your teaching position you earn £54k gross?  If your pension contributions are more than £4000 a year then you are ok, can't comment on your Employment 2 as I am unsure what you mean, if this is a second employment you need to add that salary on.

It meant to show that I moved jobs.
so my first job was 54k. Then I left and am
now getting 52k.

I will read these posts and try and work this out. It’s at least only 4 years.

Still a bit confused as to if we have been over paid what has to be paid back. Is it a sliding scale between 50-60 or is it once you’re over 50 you have to pay a set amount back?

Thank you all for the help with this. I had to abandon my attempts at phoning citizens advice. Hour on the phone and then got put back to switchboard 🤔.

Dazed_and_C0nfused

Moneybox said:

sammyjammy said:

Not really clear, do you have two jobs?  So in your teaching position you earn £54k gross?  If your pension contributions are more than £4000 a year then you are ok, can't comment on your Employment 2 as I am unsure what you mean, if this is a second employment you need to add that salary on.

It meant to show that I moved jobs.
so my first job was 54k. Then I left and am
now getting 52k.

I will read these posts and try and work this out. It’s at least only 4 years.

Still a bit confused as to if we have been over paid what has to be paid back. Is it a sliding scale between 50-60 or is it once you’re over 50 you have to pay a set amount back?

Thank you all for the help with this. I had to abandon my attempts at phoning citizens advice. Hour on the phone and then got put back to switchboard 🤔.

It is a set amount, on a sliding scale.

The charge is 1% of the Child Benefit for each £100 your adjusted net income exceeds £50,000.

So ANI of £50,099 nothing to pay.  £50,100 is 1% and by the time you get to £60,000 it's 100% of the Child Benefit.