Higher income child benefit tax

RaraWoulib

Hi, I’m new here and don’t know much about tax so I hope to get some help. I got a letter from HMRC that I need to do pay back son if the child benefit as my salary for year 2022/2023 hit £53k. I have a few questions:
1) do I declare that the charge amount should be taken out of my tax in the coming years?
2) I expect to earn a bit more in the coming years, shall I opt out asap?
3) or shall I increase my pension contributions or do gift donations? How do I calculate whether this would make sense?
Any tips would be greatly appreciated. 

Deenport

Hi. If you earn £53k then you are only repaying a percentage of the Child Benefit back, not the whole amount. There is a High Income calculator on HMRC website that you can use to gauge the amount. 

Depending upon how much and your ability to pay, my advice would be to pay it all back immediately. If you decide to opt out, you can claim back some or all of the benefit if you do not meet the 60K threshold each year. Don’t know much about increasing pension contributions etc. hope that’s of some help 

Lee131

Well if you can afford it then increase your pension contributions.  You'll get 42% top up on them.  Obviously make sure you do your place of work reclaim , i.e. tools uniform washing, gift aid donations etc. 
Don't opt out of child benefit because you could miss out should your circumstances or the thresholds change

Deenport

Lee131 said:

Well if you can afford it then increase your pension contributions.  You'll get 42% top up on them.  Obviously make sure you do your place of work reclaim , i.e. tools uniform washing, gift aid donations etc. 
Don't opt out of child benefit because you could miss out should your circumstances or the thresholds change

If not opting out, might be a good idea to put the benefit aside each month and once you complete your tax return for the year, you can use the money to repay and keep the rest.