Child maintenance tax charge

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taper
taper Posts: 16 Forumite
First Anniversary First Post Combo Breaker
in Child support
Hi
I am a single mum with a 15yr old daughter. I have always claimed child maintenance but pay it back through my tax code as I earn over £50k.
My daughter is now living with her Dad and his partner, both earn less than £50k.
If I stop receiving payment and they start to claim, would I still have to pay the tax charge?

Thanks

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  • Fission
    Fission Posts: 225 Forumite
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    It seems that you are confusing Child Support (maintenance paid by one parent to the other when they live apart) and Child Benefit (a social security benefit paid to a parent (or two parents) who has a dependent child.

    Your query seems to be about Child Benefit.
  • CakeCrusader
    CakeCrusader Posts: 1,118 Forumite
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    Sorry, your question's a little confusing, do you mean you've claimed child benefit when you weren't entitled and you're paying it back via your tax code?



    There is no tax payable for child benefit or for child maintenance. You're entitled to child maintenance no matter what your income is, child benefit isn't payable for people who earn over 50k, as Fission says. If your child has moved in with her father then he will be able to claim this, it's £20 and about 20p a week. It shouldn't affect the amount of tax that you pay as this is a benefit, it's not deducted and there should be no change to your tax code. If you're earning over 50k you don't receive it, you're only supposed to pay it back if it's been overpaid.



    You may have to pay your ex partner child maintenance if your child moves in with them. You can either arrange this yourself with your ex partner, or they can go to the Child Maintenance Service (the CMS charge a fee if they collect the child maintenance from you though so you're better off sorting it between yourselves if your ex is willing). There's a child maintenance calculator here so you can work out how much you have to pay your ex. This doesn't come out of your tax code, you have to pay this directly to your ex or to the CMS; https://www.gov.uk/calculate-child-maintenance
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
    Name Dropper First Post Photogenic First Anniversary
    edited 19 August 2019 at 11:21AM
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    CakeCrusader wrote: »
    Sorry, your question's a little confusing, do you mean you've claimed child benefit when you weren't entitled and you're paying it back via your tax code?



    There is no tax payable for child benefit or for child maintenance. You're entitled to child maintenance no matter what your income is, child benefit isn't payable for people who earn over 50k, as Fission says. If your child has moved in with her father then he will be able to claim this, it's £20 and about 20p a week. It shouldn't affect the amount of tax that you pay as this is a benefit, it's not deducted and there should be no change to your tax code. If you're earning over 50k you don't receive it, you're only supposed to pay it back if it's been overpaid.
    This isn't quite correct. Over £50k your entitlement to CB is taxed and therefore reduced until a certain level (salary); I believe £60k.

    There are two questions here from the OP:
    1. Should they continue to receive CB, as the child is no longer living with them; I assume this is a permanent arrangement.
    2. Can you mitigate the effect of being a HRT tax payer to retain CB

    Re 1 - If you are no longer responsible for looking after the child and they are now residing permanently with the other parent then they should make the claim for CB and it will then be switched from you to them.

    Re 2 - I'm unsure if simply making additional pension contributions will lower your taxable income to a level that no longer incurs the additional CB tax (over £50k). I'd need to delve in to this further. Alternatively, does your company pay you via Salary Sacrifice (sometimes referred to as salary exchange)? Making additional pension contributions via SS will definitely reduce your salary level and therefore reduce (or remove if earnings reduced to £50k) the additional tax for CB.

    CB tax calculator here.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
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