P11 on self assessment means I have to payback child tax credit. Am I being punished twice?

Ne1878

I have a company vehicle, because of this my tax free amount is reduced. Now when I add the P11 details on self assessment I am over the child tax threshold and have to pay some back. Is this correct? Feels like I’m being ‘taxed’ twice 

Dazed_and_C0nfused

Ne1878 said:

I have a company vehicle, because of this my tax free amount is reduced. Now when I add the P11 details on self assessment I am over the child tax threshold and have to pay some back. Is this correct? Feels like I’m being ‘taxed’ twice 

No, you are not being taxed twice, you have misunderstood how tax works. 

But the cost to you of that company benefit is more than it would usually be as it increasing your overall income tax liability and can also mean any HIgh Income Child Benefit Charge is more than it would otherwise be.

You cannot turn back time but if you object to the tax and HICBC consequence you could always return the vehicle and pay less tax/HICBC going forward.

Ne1878

So I lose some of my tax free amount and now I lose another lump of my tax free amount to pay back the child benefit ‘overpayment’. Sure feels like I’m being taxed twice 😂

Suppose I was asking is this correct. Unfortunately it seems like it is,

Thanks for the reply.

sheramber

A company car benefit is equivalent to a salary payment. 

But it cannot be taxed under PAYE as your salary is so some personal allowance is deducted in working out your code number. 

If you had received the salary equivalent you would not need a restriction on your code number but you would pay the same tax  on the increased income. 

Repaying child benefit is not paying tax. It is repaying money that was paid.

For convenience, HMRC decided to recover the overpayment through the tax system.