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Do any of you that meet the criteria for the Higher Income Child Benefit Tax Charge actually bother to claim the benefit and pay the charge through a self-assessment tax return (assuming your income is within the bracket which provides a net benefit)?
No, opted out to save the hassle.
I did last year as I was only a few hundred over the threshold so seemed like a lot to pass up on for the sake of filling a form.
Added bonus was when I did my return it turned out I'd been on the wrong tax code and I was actually due a rebate 😀
Yep, at the lower end of the threshold so still a net benefit for me. And it get's straight to SWHMO, so I'd be having to pay it either way. 😆
Yes, but only because I'd heard that by claiming CB, it means it keeps my wife's NI payments up to date whilst she's not working. This may or may not be the case.
Yes, but only because I'd heard that by claiming CB, it means it keeps my wife's NI payments up to date whilst she's not working. This may or may not be the case.
Yeah you get NI paid for you if you claim NI. I believe as long as you're registered for CB then she gets the NI payments, at least my wife got a NI statement last week to check this and it appears to show the payments for the last year even though we've not had a CB payment for over a year.
I Am Not A Benefit Expert, obviously.
You don't need to do a full return, at least I didn't
I don't claim it.
I have a friend who claims it to pay back the debt of the CB for the previous year....
We always took Child Benefit but opted not to take Child Tax Credits.
My wife claims it and I pay the tax. If your situation changes during the year then you can't back claim the child benefit but the tax will sort itself out, so for the minimal hassle (I'd probably be doing a return anyway) it's a no brainier.
I'm assuming if your a high earner your a high tax payer. Get some of your money back and spend it as you see fit. I'll bet you'll do a better job than whatever the government of the day is.
^^^ this, give it to charity if you wish
Quick q....if you don't get asked to do a tax return....how will they ever know?
IIRC when the change was first introduced I was earning over 60k but not completing a tax return, so opted not to receive it and then repay - I prefer minimal tax hassle in my life (not so easy these days - a nice problem to have!).
Quick q....if you don't get asked to do a tax return....how will they ever know?
Given the government department who collect your income tax also know your income, and are also the ones dishing out your child benefit, it would be pretty easy for them to work it out should you be lucky enough to be picked for a random check.
I get paid it then pay it back - I prefer to do a tax return as seems easier to make sure I pay and get back the right amounts. I figure I may as well get the payments as could lose my job one day so will want CB then.
I still get it, I have to do a tax return anyway so it's no extra hassle. They claw it back via the tax code, effectively 2 years in arrears, so I think of it as an interest-free loan in perpetuity. Or at least until the kids grow up!
Given the government department who collect your income tax also know your income, and are also the ones dishing out your child benefit, it would be pretty easy for them to work it out should you be lucky enough to be picked for a random check.
I'd be surprised if this happened, every year I claim back higher rate Tax relief on Pension Contributions and have to provide proof of the contribution. This is even though they have already paid me 20% back and given me a unique reference number for that, so they already 'know' exactly how much I have paid in and with whom etc....
They really don't seem joined up at all...
No, if it was joined up it would happen automatically, hence why I said would need to be done by random check, which they are known to do.
What are the thresholds?
Just checked for myself - £50k to £60k
Less than £50k you're fine, more than £60k you're not. in between then debatable depending where you are
I binned it this year as I've now gone regularly over the upper threshold with bonuses .. before that it was like an additional housekeeping sum into the joint account, which I squared up at the end of the year. I think I'll still have to do returns though till I'm told I can stop?
I did get caught by it - I received a post employment pay from a previous employment that I believed had been taxed at source. It wasn't so I had to repay the tax due and a fine. Can't complain really but I can grumble a bit 🙂
IF you are borderline it's worth doing as pensions etc. will mean you might not have anything to settle up anyway (try a calculator)
No, if it was joined up it would happen automatically, hence why I said would need to be done by random check, which they are known to do.
This was how I got 'caught' - a random check of a year that was complicated tax wise (for me as a PAYE bod at least).
Yep, just because now our income is over the threshold we're too slovenly to fill the form in to stop it. Just easier to let the big jugged accountant sort it out on my tax return.