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Where Taxpayers and Advisers Meet

Child Benefit Allowance

JC65
Posts:1
Joined:Sat Feb 12, 2022 11:14 am
Child Benefit Allowance

Postby JC65 » Sat Feb 12, 2022 11:30 am

Hi

I currently receive child benefit payment for 2 children during 2021 - 2022 tax year. Current total income is approximately £2k below child benefit threshold of £50,099. In March I will receive a 3% bonus (one off payment) and a 2% salary increment paid monthly

I have worked out (with as much accuracy as possible) that the combined increase will result in total earnings being above the child benefit threshold. The following month of April 22 total income would return below the benefit threshold.

My query is will I have to payback 2021-2022 child benefit due to going above the threshold as a result of the 3% bonus being awarded in March 2022.

Any guidance would be appreciated

Regards
JC

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: Child Benefit Allowance

Postby darthblingbling » Sun Feb 13, 2022 11:49 am

You pay back a percentage of the benefit, basically 1% per £100 over the ,£50k threshold. So you only pay it all back if you earn £60k or over as taxable income for a tax year.

If your employer operates a sal sac pension scheme and you don't need the cash right now you could ask if the payment could instead be converted to an employer's pension contribution. This could then keep your taxable income below £50k for the year. You'd also save on National Insurance.

If they don't, still other options such as contributions to your a private pension scheme or non sal sac workplace scheme. They'd be no NI saving tho. Also option to make a charitable donation via Gift Aid.


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