HICBC question

Capri84

Hey folks

Ive been paying the HICBC for a few years now… PAYE but fill in self assesment every year. 

Had a question, regarding the changes announced at the budget for the 2024/25 tax year. 

What am I paying currently for HICBC via my tax code? How is it charged?

Is the 2024/25 being charged throughout this year and then an adjustment for any underpayment in the previous year? Or am I paying for 2023/24 through the next year plus an adjustment for any underpayment in 2022/23? 

Hard to see exactly which year I’m paying for… 

If it’s a year in arrears then the announced changes won’t actually help for another 12 months.

Dazed_and_C0nfused

Unless you provide details of what your tax code deductions are no one can help you with this as there are a few options.

1.  You could be paying the 2022-23 Self Assessment liability (which would include any HICBC due for 2022-23)

2.  You could be paying some extra tax for 2023-24 which will mean you will have less to pay when you file your 2023-24 tax return

3.  You could be provisionally paying some extra tax for 2024-25.  Which will help you have less to pay when you file your 2024-25 tax return.

1 is by far the most likely.

2 is very unlikely.

3 is possible but most definitely not very MSE!

Capri84

This was my tax code issued back in Feb. Wondering if it’ll be re-run to take into account the changes for 24/25 in terms of HICBC

Dazed_and_C0nfused

Capri84 said:

This was my tax code issued back in Feb. Wondering if it’ll be re-run to take into account the changes for 24/25 in terms of HICBC

That looks to be the Self Assessment tax owed from 2022-23 (the £395) and the Child Benefit deduction is so you pay extra towards this year's HICBC.

I haven't read anything about how HMRC will deal with the change to HICBC thresholds but I would think they will have to do something this spring as it's not viable to leave things as they are for the whole year.

They will probably do some recalculation using the latest estimate of your earnings (from your employers Real Time Information submissions) in April or May would be my guess.