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Where Taxpayers and Advisers Meet

Tax anomaly and HICBC

JCook
Posts: 6
Joined: Tue Mar 03, 2015 6:23 pm

Tax anomaly and HICBC

Postby JCook » Sun Mar 24, 2019 8:10 pm

I have just been informed by my employer, due to an anomaly this year I will be paid 14 times instead of 13(lunar pay). I was paid on 6/4/18 and I will be paid on 5/4/19 for the 14th time in the tax year.

How will HMRC View this additional payment as it will put me way over the £50k threshold for the HICBC. Even though my annual salary is below the threshold?

D&C
Posts: 61
Joined: Thu Dec 22, 2016 10:04 pm

Re: Tax anomaly and HICBC

Postby D&C » Sun Mar 24, 2019 9:41 pm

Your salary is completely irrelevant as far as the High Income Child Benefit Charge is concerned.

You need to read up on "adjusted net income".

But the 14th payment is just additional pay in 2018:19 so if this you over the limit for HICBC then you will be liable

You should also be aware that to avoid complaints from staff your employer will tax you as normal on this 14th payment i.e. the same tax code as used on the previous payment will be used.

This mean you will also owe tax by virtue of receiving an extra 4 weeks of your tax code allowances. If you are on the standard emergency tax code of 1185L then you will probably owe c£365 because of this.
NB. Your employer is not doing anything wrong using the same tax code, it is done like this to avoid you getting an unexpectedly low take home pay on what is essentially just another "normal" pay day

To get ahead of the game you might want to consider registering for Self Assessment sooner rather than later. That was you can complete your return before 31 December 2019 and that way you can pay off what you owe through your 2020:21 tax code. Effectively an interest free loan from HMRC.

JCook
Posts: 6
Joined: Tue Mar 03, 2015 6:23 pm

Re: Tax anomaly and HICBC

Postby JCook » Mon Mar 25, 2019 10:07 am

I thought that would be the case regarding the HICBC, not taken into account the additional income tax that will be due though.

Thanks for the info.


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