Child Benefit - Calcutating Charge.....

Hi, I had a taxable income of 55k in the last tax year which includes things like private health insurance. The Child Benefit tax calculator came back with a estimated tax charge of £850 which seems about right. The self assessment form however says the total amount due is £1,525 with the same information entered, which is almost all of it. Does anyone know why there is such a discrepancy between the two and how I can query it before submitting it.

Hi,

For every £100.00 that is over the adjusted net income of £50000.00, 1% of the child benefit needs to be repaid.  £5000.00 over £50000.00 is equal to 50% needing to be repaid.  At £60000.00 or above, then 100% would need to be repaid.  

Adjusted net income includes more than just employment income, so it is possible that your tax return is including income not used on the calculator. 

Personal Allowances: adjusted net income

You can also contact our Self Assessment team so we can investigate.

Self Assessment: general enquiries

Thank you.

I am the thousandth person to have a similar query. The volume of similar questions must be telling HMRC something. Re: Calculation of Higher Rate ChiB tax for 22/23. Earnings after NHS pension payments made BEFORE tax. £53200 Income from savings £300, so running total £53500. I pay professional fees and expenses allowed against tax totalling £1300. So, I would say my NET income for Higher Rate ChiB is £52200. I do self assessment, but prefer to know my liability so that I can set the money aside. Are my assumptions / calculations correct? Thanks

The Child Benefit tax calculator may have estimated your tax charge based on your estimated income for the year, whereas your self-assessment form is based on your actual income for the tax year. If your income increased significantly during the year, the amount of tax you owe could be higher than the estimate provided by the calculator. Another case can be that the self-assessment form takes into account all of your deductions and credits, which could reduce the amount of tax you owe. The Child Benefit tax calculator may not have accounted for all of your deductions, resulting in a higher estimate of your tax liability.

Thanks for the reply, Shirley. My query is not based on estimates etc. My query is…..are expenses like professional fees and other allowable work related expenses taken into account when calculating net income? If yes, that’s fine.

Hey there! Thanks for clarifying your query. To answer your question, yes, professional fees and other allowable work-related expenses are typically taken into account when calculating net income. Net income is generally calculated by subtracting allowable deductions from gross income. These deductions can include a range of expenses related to your work, such as professional fees, equipment costs, and travel expenses, among others. Of course, the specific deductions that are allowable will depend on your particular situation and the tax laws in your country or region. So, if you have any further questions about what expenses are deductible or how they will be factored into your net income calculation, it's probably best to consult with a tax professional. I hope this helps! Let me know if you have any more questions.

Shirley Brilliant, absolutely clear now. Many thanks D

Hi Den,

You are correct

Thank you. 

I am happy I've helped you!