Hi, Hoping someone could advise re a question I have relating to the Child Benefit High Income Charge and how this affects my tax coding. I have elected to continue to receive the CB and complete the SA before the end of December in order for the high income charge to be collected from my PAYE.
My query relates to how this is reflected on my tax code notice and more precisely how the charge affects my tax free personal allowance.
The HMRC seem to reflect two lines on my tax code notice which relate to the CB charge.
These appear as;
Personal Allowance: XXX
Less Child Benefit Charge: XXX
Less Underpayment Restriction: XXX
Total tax-free allowance: XXX
According to the notes -
the item "Less Child Benefit Charge" relates to Child Benefit Charge "This is a deduction to recover the child benefit you or your partner received as we expect your income to exceed £50,000 We will check this when we receive your tax return for the year to 5 April 2017"
the item "Less Underpayment Restriction" relates to Tax you owe us "We previously told you that you owe £xxx from an earlier tax year
The underpayment amount does relate to the CB charge from a previous year.
I would like to know whether this is correct as both amounts (Less Child Benefit Charge + Less Underpayment Restriction) reduce my tax free allowance considerably - hence, if this is the correct approach I am trying to decide whether it is worthwhile continuing to receive the benefit.
Not looking for advise as such - more that the coding notice is correct.
Would appreciate any feedback / experience you are able to share...
Kind Regards,
Tony
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