High Income Child Benefit Charge

ceepan

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

sheramber

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

Dazed_and_C0nfused

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

HICBC is based on adjusted net income and untaxed interest is taxable income and forms part of your ANI.  So that £400 will add 4% to your HICBC.

Did you complete the return ignoring HICBC first, that will show your starting point i.e. tax owed for some other reason.  Then add in the HICBC element.

ceepan

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

ceepan

Dazed_and_C0nfused said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

HICBC is based on adjusted net income and untaxed interest is taxable income and forms part of your ANI.  So that £400 will add 4% to your HICBC.

Did you complete the return ignoring HICBC first, that will show your starting point i.e. tax owed for some other reason.  Then add in the HICBC element.

Taking the HICBC section away shows that I owe £118.38.  Any idea where that comes from?  Without the HICBC surely the £400 interest should be within my £500 allowance.  With the HICBC isn't most of the £400 taken away with my pension contributions of £300 gross (£240 actually paid plus the £60 that the pension provider has reclaimed)?

In terms of tax relief on pension contributions, is the remaining tax relief at the higher rate (which will be the Scottish higher rate) sorted out by me completing the self assessment?  We had stopped claiming child benefit in 2021 but started again in the 2024-2025 with the change to the thresholds.  As a result I had told HMRC that I no longer required to file a self assessment.  Does that mean that I haven't been getting the higher rate tax relief on those pension contributions?  I have been paying £20 a month in all of those years (2021-2022, 2022-2023, 2023-2024).  If so how do I go about reclaiming that?

Thanks,
Paul

sheramber

ceepan said:

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

What extra personal allowance have you  been given in your code to get 13000? 

ceepan

sheramber said:

ceepan said:

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

What extra personal allowance have you  been given in your code to get 13000? 

I have no idea.  Have they possibly changed it to account for my pension contributions at the higher rate?  I will try and speak to somebody at HMRC to clarify but they are closed today.

Dazed_and_C0nfused

ceepan said:

sheramber said:

ceepan said:

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

What extra personal allowance have you  been given in your code to get 13000? 

I have no idea.  Have they possibly changed it to account for my pension contributions at the higher rate?  I will try and speak to somebody at HMRC to clarify but they are closed today.

A tax code is only ever an estimate.  If you haven't kept upto date to check if S1300L was accurate then you could well owe extra tax.

That is 430 extra tax code allowances over and above the bog standard 12570.

So for a Scottish higher rate payer that could easily be over £100 owed (after factoring in the little pension contribution).

Or could you have claimed some expenses and neglected to include them on your return?

ceepan

Dazed_and_C0nfused said:

ceepan said:

sheramber said:

ceepan said:

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

What extra personal allowance have you  been given in your code to get 13000? 

I have no idea.  Have they possibly changed it to account for my pension contributions at the higher rate?  I will try and speak to somebody at HMRC to clarify but they are closed today.

A tax code is only ever an estimate.  If you haven't kept upto date to check if S1300L was accurate then you could well owe extra tax.

That is 430 extra tax code allowances over and above the bog standard 12570.

So for a Scottish higher rate payer that could easily be over £100 owed (after factoring in the little pension contribution).

Or could you have claimed some expenses and neglected to include them on your return?

I don't have any expenses to include.  Looking back they seem to have had me on that code for the since 2022.  I will contact them tomorrow to try and find out what is going on. Thanks for your input.

Dazed_and_C0nfused

ceepan said:

Dazed_and_C0nfused said:

ceepan said:

sheramber said:

ceepan said:

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

What extra personal allowance have you  been given in your code to get 13000? 

I have no idea.  Have they possibly changed it to account for my pension contributions at the higher rate?  I will try and speak to somebody at HMRC to clarify but they are closed today.

A tax code is only ever an estimate.  If you haven't kept upto date to check if S1300L was accurate then you could well owe extra tax.

That is 430 extra tax code allowances over and above the bog standard 12570.

So for a Scottish higher rate payer that could easily be over £100 owed (after factoring in the little pension contribution).

Or could you have claimed some expenses and neglected to include them on your return?

I don't have any expenses to include.  Looking back they seem to have had me on that code for the since 2022.  I will contact them tomorrow to try and find out what is going on. Thanks for your input.

Why not just look at the breakdown of your current tax code online.

That will probably explain the 430.  Albeit you might then want to check if is the same in prior years.  But it probably would be.

ceepan

Dazed_and_C0nfused said:

ceepan said:

Dazed_and_C0nfused said:

ceepan said:

sheramber said:

ceepan said:

sheramber said:

ceepan said:

After a few years of not claiming Child Benefit, my wife and I started claiming it again at the beginning of the 2024/2025 tax year due to the changes in the thresholds from £50000 - £60000 to £60000 - £80000.  As a result I needed to reregister for Self Assessment.  My P60 became available today so I thought I might as well complete my Self Assessment and get it out of the way.  Child Benefit is the only reason I need to complete Self Assessment.

I had firstly used https://www.gov.uk/child-benefit-tax-calculator to get an idea of how much I should pay back.  It said that I should pay back £796.  That is based on my income from my P60 of £67624.  I also added £240 that I pay to a pension, which it asked for before the tax relief had been adjusted.

When I attempted to complete my Self Assessment, using those same figures (Tax Paid for the year from my P60 is £16246) it claims that I have to payback £958.38.  The only thing different on my Self Assessment is that under the Pension I entered the value of £300 as it asked for it to include the 20% tax relief by taking the amount paid (£240 which is £20 a month) and dividing it by 80 and multiplying by 100. Under the UK Interest I put the total interest I have earned for the year of £400 which is untaxed.

I have 2 children so the value calculated by the form is £2212 for the year.

Can somebody please explain why there is such a big difference?  I expected a slight difference as I believe that even although the £400 of interest is under the £500 allowance I have before paying interest on that, it still has a slight impact on what I need to payback.

Thanks,
Paul

What code number is on your P60?

Are you a Scottish tax payer as the tax rates are different?

I am a Scottish Tax Payer.  The code on my P60 is S1300L.

What extra personal allowance have you  been given in your code to get 13000? 

I have no idea.  Have they possibly changed it to account for my pension contributions at the higher rate?  I will try and speak to somebody at HMRC to clarify but they are closed today.

A tax code is only ever an estimate.  If you haven't kept upto date to check if S1300L was accurate then you could well owe extra tax.

That is 430 extra tax code allowances over and above the bog standard 12570.

So for a Scottish higher rate payer that could easily be over £100 owed (after factoring in the little pension contribution).

Or could you have claimed some expenses and neglected to include them on your return?

I don't have any expenses to include.  Looking back they seem to have had me on that code for the since 2022.  I will contact them tomorrow to try and find out what is going on. Thanks for your input.

Why not just look at the breakdown of your current tax code online.

That will probably explain the 430.  Albeit you might then want to check if is the same in prior years.  But it probably would be.

I can't see a breakdown for this current year or 2024-2025.  The 3 years prior are as below.  My assumption is that the £312 is for pension contributions but They am lost. I will contact them over the next few days to try and workout what is going on.

Tax-free income6 April 2023 to 5 April 2024

Tax-free income

Description	Amount
Personal Allowance	£12,570.00
Other allowances, deductions and expenses	£312.00