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Child benefit repayment - Pay off or add to tax code?

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    Child benefit repayment - Pay off or add to tax code?

    Must admit wasn't aware you could do it via tax code.....

    Yes, I know some of you manage to not have to pay this back. (I used to by sharing divs with the mrs so we both went right up to the limit). Alas, those of IR35ed in the Public Sector its not doable.

    Last years I paid it all back end of January. Advantage of adding to your tax code is I dont have to stump up the £2K in January and it can stay in my savings?

    But is there any scenario where, in effect, paying your tax the next year could work out disadvantageous?
    Rhyddid i lofnod psychocandy!!!!

    #2
    I personally don't like anything that messes with my tax code as it's hard to be completely sure that the right amount has been taken and, when you're all paid up, you have to make sure your tax code is correctly updated. Chances are you'll over pay and have to claim a refund.

    That said, I can see the appeal for not having to find a lump sum in January.

    Comment


      #3
      Originally posted by psychocandy View Post
      Must admit wasn't aware you could do it via tax code.....

      Yes, I know some of you manage to not have to pay this back. (I used to by sharing divs with the mrs so we both went right up to the limit). Alas, those of IR35ed in the Public Sector its not doable.

      Last years I paid it all back end of January. Advantage of adding to your tax code is I dont have to stump up the £2K in January and it can stay in my savings?

      But is there any scenario where, in effect, paying your tax the next year could work out disadvantageous?
      try here
      https://www.citizensadvice.org.uk/wales/

      Sounds like a permie question.
      I'd do it by SATR myself and pay the money as needed. When I was permie it always worked out cheaper than I feared anyway. It's also a route to claim extra stuff like some tax back on any business miles you did, despite what an umbrella's opinion is on what can or can't be done.
      See You Next Tuesday

      Comment


        #4
        Originally posted by ladymuck View Post
        I personally don't like anything that messes with my tax code as it's hard to be completely sure that the right amount has been taken and, when you're all paid up, you have to make sure your tax code is correctly updated. Chances are you'll over pay and have to claim a refund.
        This. Plus another joy we often see is HMRC amend a tax code to collect a historic underpaid debt. The individual then does a personal tax return, where they don't mention the historic underpaid debt. This then means the PAYE overpayment in that year gets refunded back to the individual, hence in turn HMRC get grumpy that they're now underpaid on the historic year again.

        Comment


          #5
          Originally posted by Lance View Post
          try here
          https://www.citizensadvice.org.uk/wales/

          Sounds like a permie question.
          I'd do it by SATR myself and pay the money as needed. When I was permie it always worked out cheaper than I feared anyway. It's also a route to claim extra stuff like some tax back on any business miles you did, despite what an umbrella's opinion is on what can or can't be done.
          Question for everyone if you're income is over £50K and you've got kids and not cancelled the child benefit
          Rhyddid i lofnod psychocandy!!!!

          Comment


            #6
            Originally posted by psychocandy View Post
            Question for everyone if you're income is over £50K and you've got kids and not cancelled the child benefit
            If you keep on receiving the child benefit then the main child-carer gets NI credits.

            So, for example, if husband goes to work and wife stays at home - then receiving and paying back the child benefit results in NI credits for the wife - meaning she gets more of the state pension when she retires.

            My wife hasn't worked for nearly 20 years and has had full NI credits during that time.

            Comment


              #7
              Originally posted by psychocandy View Post
              Question for everyone if you're income is over £50K and you've got kids and not cancelled the child benefit
              Yes. And if Johnson makes the higher rate threshold £80k (as he promised in his leadership bid), and doesn't change the child benefit cap (which seems likely) then it becomes very pertinent.

              I did answer the question as well as calling you a permie though....
              See You Next Tuesday

              Comment


                #8
                We kept getting paid it and just repay in January.

                This meant we knew that my wife would get her NI credits, whilst it "should" happen anyway if you opt not to have it paid I don't trust the DWP to get it right

                At least this way it's been paid out so there is a record that she should have gotten the NI credit

                Comment


                  #9
                  so bottom line- if I decide to pay via tax code is there any way I'd end up paying more?
                  Rhyddid i lofnod psychocandy!!!!

                  Comment


                    #10
                    Originally posted by psychocandy View Post
                    so bottom line- if I decide to pay via tax code is there any way I'd end up paying more?
                    Probably

                    Comment

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