High child benefit charge, repayment through salary, can anyone explain?

agentblackcat

Hi. I owe £973 to HMRC for high child benefit charge. I opted to have this taken through payroll so repaid through my monthly salary. HMRC have adjusted my tax code to compensate for this to S1052L. So adjusted my tax code personal allowance by £2318. Can someone explain this as I just can't understand it when I only owe £973

Thanks :)

kaMelo

Your personal allowance has been reduced meaning an extra £2318 of income becomes taxable. £2318 taxed at 40% will mean you pay an extra £927.20 in tax.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6663489/high-child-benefit-charge-repayment-through-salary-can-anyone-explain

It's not your Personal Allowance, it's your tax code allowances that have been reduced.

A reduction of £2,318 for a 42% payer (higher rate in Scotland) will mean you should pay an extra £973.56 in tax.

Dazed_and_C0nfused

Taxpayer is Scottish resident though so there is no 40% tax rate for PAYE income.

agentblackcat

Thanks for explaining this. HMRC tried to explain on the phone but it was so confusing