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Where Taxpayers and Advisers Meet
Child Benefit
I'm looking for some guidance on this as not really clear. HMRC website states that if your 'net adusted income' is over £50k your child benefit is reduced accordingly. If my salary was £8000 and gross dividend £43k (before tax) then my gross income is £51k. But I then have to pay tax on that dividend income which then reduces my net income for that year to well below £50k. So does this mean that I am stating my 'net adusted income' is below £50k?
Re: Child Benefit
K,
Based on the information you have provided, your adjusted net income is £51k.
It does not mean "adjusted for tax" but adjusted for losses, pension contributions or Gift Aid donations, or other deductibles.
At the moment, it does look like you owe 10% of your (or your partner's / spouse's, etc.) Child Benefit award back.
But if you made any pension contributions or Gift Aid donations, etc., then that exposure might be reduced.
Kind regards,
Lambs
Based on the information you have provided, your adjusted net income is £51k.
It does not mean "adjusted for tax" but adjusted for losses, pension contributions or Gift Aid donations, or other deductibles.
At the moment, it does look like you owe 10% of your (or your partner's / spouse's, etc.) Child Benefit award back.
But if you made any pension contributions or Gift Aid donations, etc., then that exposure might be reduced.
Kind regards,
Lambs
Re: Child Benefit
Thanks for the advice. But how is this 'net' adjusted income. Net means after tax? This was my gross income, before paying tax. 
Re: Child Benefit
Net does not mean specifically "after tax". It can mean net of losses, net of other deductions, net of reliefs...
There is adjusted income, and there is adjusted net income. The difference here is in relation to the aforementioned pension contributions and Gift Aid donations, which are netted off against adjusted income to derive adjusted net income, for the purposes of ascertaining exposure to a clawback of Child Benefit.
Regards,
Lambs
There is adjusted income, and there is adjusted net income. The difference here is in relation to the aforementioned pension contributions and Gift Aid donations, which are netted off against adjusted income to derive adjusted net income, for the purposes of ascertaining exposure to a clawback of Child Benefit.
Regards,
Lambs
