Child Benefit Tax Charge

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paye
paye Posts: 448 Forumite
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in Cutting tax
Hi,

Please beat me down if you want, But I think I a considerable child benefit tax charge is on the way as I'm classed as a high earner even through it doesn't feel like it:mad:.

Can someone please advise if student loan is an allowable deduction and if my assumption of paying circa £3,576 (excluding fines) is correct based on my earnings which I have listed below from my P60:

2015-2016 I earned £48,158.00 ( I assume no tax charge)
2016-2017 - £62,695.00 ( Assume tax charge)
2017-2018 - £64,481.00 (Assume Tax Charge)


I knew nothing about this tax charge which is no excuse on my part and only found out after reading a post on here, I am grateful I found out sooner rather than later as it could be much worse.

I would of thought HMRC would of sent out reminders together with tax code update letters they usually send out but I guess not.

Any ideas what the fines are likely to be?.

:(
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SPC 593 paye:o

Comments

  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
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    The High Income Child Benefit Charge isn't based on P60 earnings but something called "adjusted net income".

    https://www.gov.uk/guidance/adjusted-net-income

    Not sure how fines are calculated but the consensus is that they are more likely to be less if you come forward yourself rather than being contacted first by HMRC.
  • paye
    paye Posts: 448 Forumite
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    Dazed_and_confused wrote: »
    The High Income Child Benefit Charge isn't based on P60 earnings but something called "adjusted net income".

    https://www.gov.uk/guidance/adjusted-net-income

    Not sure how fines are calculated but the consensus is that they are more likely to be less if you come forward yourself rather than being contacted first by HMRC.

    Thank you for the link, I'll read up on this now so I get a clear understanding.
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    SPC 593 paye:o
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
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    Be careful not to double deduct pension contributions.

    Depending on your companies pension scheme it might be that your P60 pay figure already takes these into account.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    You'll need to register for self assessment.

    This gives you an idea on penalties - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/677811/CC-FS11__01_18.pdf

    As it explains, if you contact them before they find out, quickly and you are open and honest about it then penalties are lower.
  • pjread
    pjread Posts: 1,102 Forumite
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    Numbers look about right for 2 years x 2 kids to me.


    I'm slightly surprised the threshold hasn't increased TBH.
  • daveyjp
    daveyjp Posts: 12,521 Forumite
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    Get the paperwork out (payslips, P60, pension info etc etc) and put aside a couple of hours for self assessment registration and completion of the online assessment form.

    You will then get an amount you need to pay. There may be a requirement to pay it all, pay by installments, or you may have the option of having your tax code adjusted to repay what is due.
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