Should I be claiming Child Benefit

Ljc80_2

Hi I was hoping for some advise on claiming Child benefit.

I have 2 Children (8 & 2) and earn a basic salary of 60k, and usually get a bonus of 5-7k

When my first child was born we started claiming this for a year or so but ended up having to pay it all back, which as I wasn't aware of the benefit tax was a bit of a bummer to say the least!

However I believe the threshold is now 60k and as I've got 2 children now thought it might be worth it.

The thought of doing a tax return thing each year for the benefit tax is also quite daunting - after last time I'm scared of getting another unexpected bill! 

Im also confused about whether I can take off pension contributions when working out whether I should be claiming it. I think I pay 3.5% into an employer pension scheme. But on the end of year P60 thing, it doesn't seem to take this off where it says gross pay for tax? Can i work on the basis of 60k+bonus-pension to calculate pay for what benefit tax i may incur?

HMRC and tax return things are daunting and i really want to know if it would be worth the hassle claiming this!?

Newbie_John

You should definitely claim it, ignoring pension you should get about 50% of the benefit.
Then if after pension (ask HR if it's taken before tax) and bonus you are £60k or below then you will get even more.

What I do I put all the money to a savings account, after a year pay portion of it as a tax and then use remaining for money for children - no surprises this way.

daveyjp

With PAYE and a P60 at hand a tax return is simple enough.  All the data you need is on your P60, you have months to complete the return and you can fill it in, change it, save it, amend etc before submitting.

As above save your child benefit and use it to pay any charge which is due.  If you ignore this issue HMRC will eventually be in touch asking for missing tax returns, so it is better to keep on top of it, rather than having to do a few years worth.

Dazed_and_C0nfused

Ljc80_2 said:

Hi I was hoping for some advise on claiming Child benefit.

I have 2 Children (8 & 2) and earn a basic salary of 60k, and usually get a bonus of 5-7k

When my first child was born we started claiming this for a year or so but ended up having to pay it all back, which as I wasn't aware of the benefit tax was a bit of a bummer to say the least!

However I believe the threshold is now 60k and as I've got 2 children now thought it might be worth it.

The thought of doing a tax return thing each year for the benefit tax is also quite daunting - after last time I'm scared of getting another unexpected bill! 

Im also confused about whether I can take off pension contributions when working out whether I should be claiming it. I think I pay 3.5% into an employer pension scheme. But on the end of year P60 thing, it doesn't seem to take this off where it says gross pay for tax? Can i work on the basis of 60k+bonus-pension to calculate pay for what benefit tax i may incur?

HMRC and tax return things are daunting and i really want to know if it would be worth the hassle claiming this!?

A tax return for someone who is employed is generally quite straightforward.

Some pension contributions can be deducted, others can't.  The ones that can be deducted are "relief at source" where the pension company adds 25% to your net contribution.

You cannot deduct "net pay" or salary sacrifice contributions.  Net pay because they are already deducted when calculating your taxable pay i.e. your P60 will already show the reduced income.

And salary sacrifice are employer contributions so you can never count them. But again your P60 would show less income as you have sacrificed some in the first place.

Ljc80_2

Thank you for your advise. I think i will try and claim, just the pension bit I am still confused about whether i can deduct it - on the P60 i cant see anything about pension. It just shows the gross pay which is salary + bonus. Do i look at the last pay slip for the year then deduct the EE pension TD amount?

Is it the end of Jan that a tax return has to be done for the previous year ending April? 

If I applied now and it was back dated 3 months, would that be next Jan i had to do first tax return?

Thank you

p00hsticks

What is the position of the other parent ?
If they are not earning, then it is worth them (not you) claiming it to accumulate the NI credits and boost their State Pension - I believe there is an option to just request the credits and not the payments if you want to avoid a tax return...

Ljc80_2

Hi - my wife is working so is paying income tax

Do you know about the timing of the tax return, if it was backdated 3 months from now, would that be the one i had to do at the start of next year? 

Newbie_John

Is your wife earning more than you?