Avoiding High Earner child benefit

Dazed_and_C0nfused

kimwp said:

I would have thought (though do not know for sure), that it's the overall sum of child benefit for that tax year and overall net adjusted income for that tax year that would count. So if your income meant that you had to pay back a third of the max (ie paid all year) child benefit for the year, then if you only claimed it for 2/3 of the year, you wouldn't need to pay anything back.

Nope, if you are liable to the High Income Child Benefit Charge you pay back a proportion of the Child Benefit received back.

If your taper amount is 33% (adjusted net income ~£66,600) then you pay 33% back.

kimwp

Isthisforreal99 said:

kimwp said:

I would have thought (though do not know for sure), that it's the overall sum of child benefit for that tax year and overall net adjusted income for that tax year that would count. So if your income meant that you had to pay back a third of the max (ie paid all year) child benefit for the year, then if you only claimed it for 2/3 of the year, you wouldn't need to pay anything back.

Wrong.....

What's the calculation?

wolvoman

kimwp said:

Isthisforreal99 said:

kimwp said:

I would have thought (though do not know for sure), that it's the overall sum of child benefit for that tax year and overall net adjusted income for that tax year that would count. So if your income meant that you had to pay back a third of the max (ie paid all year) child benefit for the year, then if you only claimed it for 2/3 of the year, you wouldn't need to pay anything back.

Wrong.....

What's the calculation?

CB for 1 child is £1,354 for a year. So £903 for the 2/3rds of the year in your example.

If you're adjusted net income for the year means you need to pay back 1/3rd of the child benefit received, then you need to pay back 1/3rd of that £903, which is £301.


What I can't get my head around is why the OP is concerned with having to pay a couple of hundred £ back in child benefit, but seems to not be worried about paying thousands extra in income tax as a result of taking pension money whilst working as a higher rate taxpayer.

kimwp

wolvoman said:

kimwp said:

Isthisforreal99 said:

kimwp said:

I would have thought (though do not know for sure), that it's the overall sum of child benefit for that tax year and overall net adjusted income for that tax year that would count. So if your income meant that you had to pay back a third of the max (ie paid all year) child benefit for the year, then if you only claimed it for 2/3 of the year, you wouldn't need to pay anything back.

Wrong.....

What's the calculation?

CB for 1 child is £1,354 for a year. So £903 for the 2/3rds of the year in your example.

If you're adjusted net income for the year means you need to pay back 1/3rd of the child benefit received, then you need to pay back 1/3rd of that £903, which is £301.


What I can't get my head around is why the OP is concerned with having to pay a couple of hundred £ back in child benefit, but seems to not be worried about paying thousands extra in income tax as a result of taking pension money whilst working as a higher rate taxpayer.

Thanks Wolvoman and Dazed, so the child benefit part of the calculation is based on entitlement in that tax year - the OP is only entitled until May, so a proportion of that entitlement (if it's received in entirety) needs to be paid back based on net adjusted income.