Child benefit charge

KierNet

Hi all,

I've had a lovely letter from HMRC saying due to my income I need to pay the child benefit income charge.

I don't understand tax. I used the calculator and worked out my adjusted income after my pension and it suggested I owe £108.

Log onto the GOV site to sort it out and its close to £1,000 for this year.

My income for last year (2025/2026) was £68,041 (basic pay was £50,000 the rest was overtime).

My pension contributions for 2025/2026 was £6,408.

Am I right in that i take my pension contributions off my total income? If so this is £61,633 which is where I got the £108 amount from.

Couple of questions.

1) The amount on my P60 under 'pay and income details'. Is this the amount I've earnt not taking into account my pension contributions. Or is that already taking into account my pension contributions?

2) Any ideas on when they will expect it to be paid? Despite earning a fair amount, my partner wasnt working for two years due to an illness so I have been smashing the OT out to pay bills etc. Its only been the last couple of months that she is back part time.

Ironically, its not even my child and these charges are more than his dad pays a year ha.

Any help would be appreciated!

Dazed_and_C0nfused

Before you do anything else you need to understand what method is used for these pension contributions.

There are three main ones used and they each work in different ways. You cannot understand HICBC until you understand the pension contribution method.

Salary sacrifice (you don't pay anything into to the pension, you agree a lower salary in return for extra employer contributions)

Net pay (taxable salary is reduced by the contribution you pay so £70k with 10% contribution would mean your taxable earnings would only be £63k)

Relief at source (you pay a net amount and the pension company adds basic rate tax relief i.e. £500 from you becomes £625 in the pension fund)

You have to find that out first.

daveyjp

Register for HMRC self assessment, fill out the form (it tells you which figures you need from your P60) and it will calculate the payment due. For small amounts it may be done through an adjustment to your code for next year.

You have until end of January 2027 to complete and submit,

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82172332#Comment_82172332

But if the op doesn't understand which method is used for their pension contributions how could they do that (accurately) 🤔

KierNet

https://forums.moneysavingexpert.com/discussion/comment/82172329#Comment_82172329

Its a police pension, but OT does not go towards it. Its around 13.44% (think it increased recently). Around £600 a month.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82172365#Comment_82172365

You need to check the method used to pay your contributions but it may well be net pay.

That means you cannot deduct them when working out the HICBC due. The simple reason being your P60 already reflects the reduced amount of taxable income as a result of these contributions.

KierNet

Google suggests its net pay.

Vitor

The crucial question is whether £68,041 is your gross earnings figure or the taxable pay shown on your P60, and how your pension contributions are taken.

If your pension uses “net pay”, contributions have already reduced your P60 pay, so you mustn’t deduct them again. Salary sacrifice is also already reflected. With “relief at source”, you deduct the gross pension contribution, including the tax relief added by the provider. Payroll should confirm which applies.

LITRG

Hi, we have guidance on the High Income Child Benefit Charge on the following pages of our website which we think you will help you to understand how the charge is calculated and paid:

• Adjusted net income calculation: Adjusted net income | Low Incomes Tax Reform Group. This page explains that only pension contributions made to a 'relief at source' scheme should be deducted when calculating your income for the purposes of the HICBC.
• How to pay the charge: High income child benefit charge | Low Incomes Tax Reform Group . You may be able to pay the charge through PAYE (that is, by deduction from your employment income via an adjustment to your PAYE tax code) if you don't otherwise need to file a Self Assessment tax return.

We also have information about HMRC's 'Budget Payment Plan' and 'Time to Pay Arrangement' which may help you to manage the payment of the charge.