Child Benefit for 1st born

V2001

Hi, we had our first child. We are not married, and live together.

Im really confused about understanding tax so seeking some clear answers in terms of claiming child benefit and higher tax

Mother earns 45k, and Father earns 68k (plus around 6k bonus a year).

Mother is on maternity pay, and will go back to work after one year. So is it worth the mother claiming child benefit being on maternity pay. Should we even claim child benefit as assuming she will pay her NI while being on paternity?

any advice on the best course of action?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6663395/child-benefit-for-1st-born

Given the maximum income for one person is £74k what downside do you to claiming?

But don't forget all taxable income, even if taxed at 0%, needs to be counted as part of the adjusted net income calculation that HICBC is based on.

Exodi

V2001

Mother earns 45k, and Father earns 68k (plus around 6k bonus a year).

Mother is on maternity pay, and will go back to work after one year. So is it worth the mother claiming child benefit being on maternity pay. Should we even claim child benefit as assuming she will pay her NI while being on paternity?

Child benefit tapering starts at £60k and ends at £80k so assuming the Father's net adjusted income (which is his income+bonus+any benefits he gets (e.g. company car, health insurance, etc) is less than £80k, then there's a net benefit to the household for claiming.

A bit of reading: https://www.gov.uk/guidance/adjusted-net-income

There's also the secondary benefit that if the mother stopped working (through redundancy, illness, etc) she'd always have her NI contributions covered.

You could consider, what reason is there not to claim?

For others, I haven't been following this for a little while - I know you had to fill out a self assessment to pay back the HICBC, but I believe there was a lot of talk/action about making it possible to do this via PAYE last year without the need for self assessment? Did that ever happen? Forum conversation about this seemed quite contradictory (online resources says it was possible, HMRC advisors said it wasn't).

sheramber

https://forums.moneysavingexpert.com/discussion/6663395/child-benefit-for-1st-born

It is the income of the higher earner that is used for the child benefit higher income charge so your partner’s maternity pay is irrelevant.

She could claim child benefit but decline payment. That would give her NI credits. She may not need them but it would cover her if she stopped working for any reason. She would not have to make a claim then.

It is a personal choice if you want to claim the payment and have to pay all or part of it back or do not claim,

assuming the higher additional net income is over £80k.

Grumpy_chap

"Father earns 68k (plus around 6k bonus a year)."

Higher earner is at £74k so that's less than £80k so child benefit will be a net flow into the household.

Assuming there are no other income streams (interest, dividend, property and such like), higher earner's ANI is likely to be even further away from £80k because of pension contributions and any gift aid.

V2001

So i take it she should claim, and the fsther pays the higher income tax via paye

daveyjp

In the first year take the money then the high earner needs to submit a tax return for the repayment amount to be calculated.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81956431#Comment_81956431

That is the relatively new option yes.

Self Assessment is no longer mandatory for HICBC if that is the only reason why a return would have been needed.