Child Benefit High Earner

[JCook]

As I understand it if you earn above £50k a year you have to pay so much of your child benefit back. My salary is £51k but I make pension contributions deducted from my gross salary of around £5k a year. I was led to believe this meant that my salary would be reduced to £46k thus meaning we would be entitled to the full child benefit, however when I go to the child benefit calculator it says don't include pension deductions that are made pre-tax.

When I rung hmrc to clarify, they said only private pensions paid net were deducted from my salary, is this correct?

Hope this all makes sense.

James

[section 44]

you're not liable to repay child benefit

[JCook]

You mean because my pension contributions do reduce my salary under the £50k threshold?

[LozaACCS]

I would agree with S44 on the following basis.

The legislation regarding The HICBC is at Part 10 (chapter 8) (ITEPA 2003)
S 681H draws the same definition of Adjusted Net Income as S58 ITA 2007.
S 58 ITA 2007 does indeed limit the deduction to contributions given at source as defined by S192 FA 2004, to this extent HMRC are correct, however before arriving at adjusted net income you must first of all arrive at net income.
Net Income is arrived at in accordance with S23 ITA 2007.
Step 2 of the calculation allows deductions in accordance S194(1) of FA 2004 (pension schemes; relief on making of claim).

So you should defend your position on the basis that the gross contribution is allowable as a deduction at step 2 of section 23 ITA 2007

[JCook]

Would this be taken care of by the payroll team under PAYE or would I need to get an accountant to do my self assessment.

Thanks in advance

[robbob]

When I rung hmrc to clarify, they said only private pensions paid net were deducted from my salary, is this correct?

when I go to the child benefit calculator it says don't include pension deductions that are made pre-tax.

Sigh - welcome to the world of hmrc advise in that they manage to make something technical but simple complicated.

The benefit calculator and the hmrc officer are both presuming you would only quote to them your "taxable pay" as shown on the p60. As ever their sloppy (but possibly not wrong depending on how the question is asked) advise such as

you may get some of this information from your P60, P11D, employer or tax adviser

as per the direct gov calculator- gives a part clue that "you must enter your taxable pay figure per p60" to get the correct answer. They don't seem to be able to comprehend the fact that some P60's show Gross and Taxable pay - sigh and that they need to be 100% explicit with adequate notes as appropriate. But they would probably argue being explicit and having notes would probably confuse more bods that in helps (sigh).

My salary is £51k but I make pension contributions deducted from my gross salary of around £5k a year.

Just to be 100% clear - 51k is your Gross pay and your taxable pay per p60/payslips is only 46k right ? - seems pretty obvious that this is the case but i am just checking that you haven't just used the P60 taxable figure presuming this is your full gross pay before pension deductions . Would hate for hmrc to be 100% correct and for all us clever cloggs bods to be wrong.

Presumably hmrc have not actively suggested that you are not entitled to child benefit - it is the case that you are being sensible and checking the numbers before the end of the tax year

[JCook]

Thanks for clearing that up, yes £51k is my gross pay before any pension contributions or personal allowance is taken into account.