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Posted Tue, 06 Apr 2021 14:33:51 GMT by P Martin
Hopefuly someone can help me to clarify the process regarding Self Assessment, Child Benefit and a possible charge. Here goes... I earn £56k and my wife has no income. I have a work place pension which from my employer which I additionally top up with a monthly contribution of £345 (£4,140 p.a.). Main reason for this is to reduce my income and pay a smaller Higher Income Child Benefit charge. I have two children and receive £1823 p.a. in Child Benefit. When I enter these details in to the gov.uk Child Benefit Calculator it says I owe a charge of £148 which sounds fair enough. Next step was to enter my details on the gov.uk self assessment site but it's not clear where I enter my monthly pension contribution of £345. If I leave it out the final calculation says I owe £1,246 which doesn't sound right. I went back through the application and entered my monthly pension contribution in the section titled: Did you make contributions towards a personal pension or retirement annuity? (NB: it's not a personal pension as it's via my work but there is no other section where I can enter this amount which is paid voluntarily in addition to my emplyer's contribution). Now when I view my calculation it says I am owed £1,156. That sounds great! It sounds too good to be true and I don't want to end up being chased for it in a few years time so wanted to see if someone can clarify why I've arrived at three different amounts and which one is correct? Any feedback much appreciated. I've been on a number of forums but cannot find a definitive answer. The only explanation I've found which makes sense is that it may be due to personal pension relief which is greater than the amount of child benefit I have to pay back which is why I'm due a tax refund.
Posted Mon, 19 Apr 2021 13:56:25 GMT by HMRC Admin 17


Hi,
 
There may be something missing from the Child Benefit Calculator.

If you have entered everything correctly on the Self Assessment then the calculation it does should be correct.

If you are unsure you can contact our Self Assessment department 72 hours after submitting your return and we can check the calculation and see the link:


Self Assessment: general enquiries .

Thank you.
Posted Tue, 26 Apr 2022 21:10:30 GMT by Peter1981
I have the same question. My situation is similar. Using example figures: if I earn £60000, but pay £10001 in pension contributions, I don't pay the child benefit charge as my "income" is less than £50k. I don't have to tick the "Income >£50k" box and the "Child Benefit High Income Charge" section of the form doesn't appear. But if I earn £60000 but pay only £9999 in pension contributions, my "income" of the purposes of the charge is more than £50k so I have to tick that box on the return and complete the "Child Benefit High Income Charge" section of the form. It then works out the charge based on my income of £60k - there is nowhere to tell HMRC about the £9999 pension contributions - so it tells me I have to pay back 100% of the Child Benefit received. It doesn't seem right that by paying £2 more in pension contributions I can reduce the charge from 100% to 0%!
Posted Wed, 27 Apr 2022 10:23:35 GMT by HMRC Admin 17

Hi,
 
On the Tailor your return page 3 of 3, there is a question that asks about pension contributions.

You need to answer yes to this question to open that section.

Thank you.
Posted Fri, 29 Apr 2022 11:20:34 GMT by Peter1981
Good afternoon, Thank you for this, but unfortunately it doesn't help. The question within "Tailor your return" asks: "Did you make contributions towards a personal pension or retirement annuity? This does not include payments you make to your employer's pension scheme, which are deducted from your pay." All of my pension contributions were made to my employer's pension scheme and deducted from my pay. So I cannot tick "yes" to this option. Even if I do, the section in question gives me the opportunity to enter "payments to your employer's scheme which were not deducted from your pay before tax", but all of my contributions WERE deducted before tax. Please could you look at this again and confirm what I should do? Regards Peter
Posted Fri, 29 Apr 2022 14:35:14 GMT by HMRC Admin 20
Hi Peter1981,

If the payments were deducted before tax, you would not be including them on the tax return as this would not decrease the taxable income.

Thank you.
Posted Fri, 29 Apr 2022 20:48:32 GMT by Peter1981
Hi, I am not talking about taxable income. I am talking about income for the purposes of the child benefit charge. Please read the example I gave in my first post here. I understand I can deduct pension payments from my income when calculating if my income is over £50k even if those payments are deducted before tax. Is that not right? Thanks Peter
Posted Sat, 30 Apr 2022 08:10:48 GMT by Peter1981
To add to my previous post - whilst my pension payments do not "not decrease the taxable income", my understanding is that they *do* decrease the "adjusted net income" used to calculate the child benefit tax charge. Thanks, Peter
Posted Wed, 04 May 2022 09:11:54 GMT by HMRC Admin 20
Hi Peter1981,

With our Child Benefit tax calculator, we are looking for your salary before tax(with pension contributions under net pay arrangement deducted) to determine if you need to pay the charge.
Please see the following: 

High Income Child Benefit Tax Charge
and
Child Benefit tax calculator

Thank you.
Posted Wed, 04 May 2022 12:59:38 GMT by Peter1981
I know that. Let me try another example. I earn £60k but pay £9k in pension contributions under net pay arrangement. So my income is over £50k, so I have to pay the charge. However, there is nowhere to input the £9k pension contributions - there is no box to input pension payments made under net pay arrangements. Please don't point me back to the "pension contributions" page of the tax return because we've already been there! That means that when the time comes to calculate the charge, it doesn't take the £9k payments into account and calculates the charge based on an income of £60k. I know I need to pay the charge. But I don't believe I should be asked to repay ALL of the child benefit, because my "effective income" should only be £51k, not £60k. Could the next HMRC agent to response please read the whole thread before replying! Thanks 
Posted Thu, 05 May 2022 15:21:01 GMT by HMRC Admin 20
Hi Peter1981,

If the contributions are under a net pay arrangement, you would enter the income figure from your P60 which should be your taxable pay after the pension contributions have been taken off.
We would not be looking for you to enter £60k as that figure does not take into account your pension contributions, and would look to recoup all of the Child Benefit.

Thank you.
 
Posted Wed, 18 May 2022 18:50:20 GMT by Lenny1986
Good evening, I'm just after some help filling in my first ever self assessment. My P60 states that I earned 56k in this tax year. My partner claims child benefit for our 2 children. I've read many articles online stating that pension contributions can be removed from my total yearly earnings (£3500) my pension is a workplace scheme taken before tax. I have spoken to an advisor who was adamant I will pay back my child benefit on my 56k amount and said the pension was irrelevant. I'm just after some clarification from someone who has knowledge on this subject or faced similar in the past. Thank you
Posted Thu, 19 May 2022 10:12:06 GMT by Bella Boo
@Lenny I'm not HMRC (although semi qualified in accountancy so do have some knowledge), just to be clear. If your pension is deducted before tax then the figure on your P60 has already taken the pension contributions into account. If your salary was 60k and pension £5k (deducted before tax). Then your pension contributions are deducted from your salary to arrive at your gross taxable pay of 55k. If you check your p60, you should see it's the gross taxable figure you're using. As pension contributions were already deducted to arrive at the p60 figure, there is no need to make a further deduction. While someone who has contributions taken after tax would have a salary of 60k, gross taxable on p60 of 60k, and would therefore need to deduct the 5k contribution. If they have the exact same salary and exact same contribution, they should also have the same adjusted net income (which is what is used for child benefit purposes) of 55k. if you deducted the 5k again (in the before tax example), the adjusted income would be 50k and that's clearly not right - their salary was 60k, they contributed 5k and therefore had income of 55k, not 50k.
Posted Thu, 19 May 2022 13:48:10 GMT by HMRC Admin 26
Hi,

If the pension contributions are taken before tax, they should not be included in the amount on the P60.

You would only be declaring the pension contributions if they were not deducted before tax as you would not have received tax relief on the income

Thank you.
Posted Wed, 24 Aug 2022 16:19:38 GMT by Natb83 Baldwin
Hi wondering if someone can help jumping on the back of this, my partner earned £55k last year and is expected to pay back nearly double what we have taken in child benefit, he got taxed nearly £500 this week alone (weekly pay) Iv cancelled the claim as clearly not right but what can we do to confirm or someone to help with this?? TIA
Posted Thu, 25 Aug 2022 17:31:24 GMT by HMRC Admin 25
Hi Natb83 Baldwin,

If you or your partner earn over £50000 in the tax year, then for every £2.00 above this figure, you will need to repay £1.00 of Child Benefit.  

This is called "High Income Child Benefit Tax Charge"
.
 Once you earn £60000.00 or above, you cannot claim Child Benefit.
 
 A Self Assessment tax return is required each tax year, where the HICBTC applies.

 The amount of Child Benefit to be repaid, will be calculated through Self Assessment.

 You can find guidance here: 

https://www.gov.uk/child-benefit-tax-charge

Thank you. 

 
Posted Mon, 05 Sep 2022 15:17:20 GMT by Stephen Salvatore
Hi, yet another one jumping on this. I am an NHS employee on the NHS pension scheme. P60 says I earned £54k last year, and my wife claims child benefit for x2 kids. I am trying to establish what my adjusted net income is for the higher income child benefit charge. Does my personal contribution towards my NHS pension count as an allowable deduction? (if so I am below the £50k threshold, if not I'm liable for the charge). I am thoroughly confused.
Posted Wed, 07 Sep 2022 14:24:29 GMT by HMRC Admin 20
Hi Stephen Salvatore,

This would depend on how the pension contributions are taken, you will need to check if the 54k is before or after pension contributions.

Thank you.
Posted Fri, 09 Sep 2022 20:16:50 GMT by Stephen Salvatore
Thank you, I've just asked our head of payroll, NHS Pension contributions are taken before tax and NI.
Posted Mon, 12 Sep 2022 10:51:57 GMT by HMRC Admin 17

Hi,
 
If they are taken before tax and NI, they would already have been deducted before that P60 figure is calculated,

therefore you would not subtract from that figure.

Thank you.

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