Child benefit when earning over 50k

Forgive me if this has already been asked but I can’t find the definitive answer - also hoped MSE might take the unfairness of this being based on sole earner over £50k and not joint income, so if both parents earn £49.9k they can claim child benefit, but if one parent early £50.1k and the other is a low earner or stay at home parent you then have to do a self assessment re child benefit. 

I currently earn £50,056 following a pay increase at work. I salary sacrifice £180
a month for tax free childcare. I have also done £1900 overtime so far in this tax year, I also get a small amount of unsocial hours pay each month (last month was a whopping £1.92 plus £0.24 working time directive pay).
my workplace pension is 10% each month although I’m finding it hard to ascertain from the .gov site if this counts in the total taxable earnings. 

Am I right in thinking that if my overtime pay stays below the £2160 that I will have salary sacrificed over the year that I won’t need to do the self assessment and won’t be liable to pay back the child benefit?

The child benefit is in my husbands name, as he is a full time parent with a 0 hours contract who works intermittently but is a low earner, and this keeps his national insurance contributions active. 

Any advice or clarity to the situation would be appreciated. 

Comments

  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,748
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    edited 20 January at 8:31AM
    Forgive me if this has already been asked but I can’t find the definitive answer - also hoped MSE might take the unfairness of this being based on sole earner over £50k and not joint income, so if both parents earn £49.9k they can claim child benefit, but if one parent early £50.1k and the other is a low earner or stay at home parent you then have to do a self assessment re child benefit. 

    I currently earn £50,056 following a pay increase at work. I salary sacrifice £180
    a month for tax free childcare. I have also done £1900 overtime so far in this tax year, I also get a small amount of unsocial hours pay each month (last month was a whopping £1.92 plus £0.24 working time directive pay).
    my workplace pension is 10% each month although I’m finding it hard to ascertain from the .gov site if this counts in the total taxable earnings. 

    Am I right in thinking that if my overtime pay stays below the £2160 that I will have salary sacrificed over the year that I won’t need to do the self assessment and won’t be liable to pay back the child benefit?

    The child benefit is in my husbands name, as he is a full time parent with a 0 hours contract who works intermittently but is a low earner, and this keeps his national insurance contributions active. 

    Any advice or clarity to the situation would be appreciated. 
    You seem to have misunderstood the rules for HICBC.

    The charge isn't based on what you earn, it's based on your adjusted net income and this is often lower due to pension contributions.

    You need to work out what your taxable earnings will be (the pay figure that will be on your P60 assuming you have had just had one job the whole tax year).  Then add any other taxable income like company benefits and (non ISA) interest.

    Finally you can deduct one type of pension contribution (relief at source ones where the pension company adds 25% to your contribution) and any Gift Aid donations.

    You cannot deduct salary sacrifice or net pay pension contributions.  This is because they are already factored in when calculating the taxable pay figure on your P60.

    If your ANI is £50,099 or less then you don't need to do a tax return (unless any other criteria apply).

    Looking at your figures HICBC is almost certainly easily avoided with some extra pension contributions.  Which your future self will thank you for come retirement 😀
  • ljayljay
    ljayljay Posts: 126
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    If your ANI is £50,099 or less then you don't need to do a tax return (unless any other criteria apply).

    Coincidentally I just came onto this forum to ask a similar question & think you may have answered it with this response but would just like to confirm.
    I found out yesterday that someone I know stopped claiming child benefit because they were concerned they were over the threshold by earning more than £50K & confused by the tariff & self assessment. As it turns out it looks like in any case, after deducting pension, their ANI could be just below £50K. So does this mean that they do not even have to do a self assessment at all? Or should they still do a self assessment to declare both gross & taxable earnings so everything is declared to show below threshold?
    I don't believe they have any other taxable income although unless thresholds are raised their ANI will no doubt necessitate self assessment at some stage in the near future.
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,748
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    ljayljay said:

    If your ANI is £50,099 or less then you don't need to do a tax return (unless any other criteria apply).

    Coincidentally I just came onto this forum to ask a similar question & think you may have answered it with this response but would just like to confirm.
    I found out yesterday that someone I know stopped claiming child benefit because they were concerned they were over the threshold by earning more than £50K & confused by the tariff & self assessment. As it turns out it looks like in any case, after deducting pension, their ANI could be just below £50K. So does this mean that they do not even have to do a self assessment at all? Or should they still do a self assessment to declare both gross & taxable earnings so everything is declared to show below threshold?
    I don't believe they have any other taxable income although unless thresholds are raised their ANI will no doubt necessitate self assessment at some stage in the near future.
    AIUI there is no requirement to do Self Assessment if there is no HICBC due (and no other criteria exists).

    But if pension contributions are paid to a relief at source there may be higher rate tax relief which can be claimed from HMRC (without the need for a tax return).
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