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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have a question about child benefit tax and my income si

Customer Question

I have a question about child benefit tax and my income situation.
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to be able to help you with your question.
Here is the general advice of the subject from the Gov UK web site:
'You get Child Benefit if you’re responsible for a child under 16 (or under 20 if they stay in approved education or training).
Only one person can get Child Benefit for a child.
You must report any change of circumstances to the Child Benefit Office.
You may have to pay a tax charge if your or your partner’s individual income is over £50,000.
You can choose not to get Child Benefit payments, but you should still fill in the claim form because:
it will help you get National Insurance credits which count towards your State Pension
it will ensure your child is registered to get a National Insurance number when they are 16 years old'
The amount of benefit is; eldest or only child £20.70, additional children £13.70 per child.
Don't forget that the Benefits Cap may apply to these payments.
I do hope you found my reply of use; please follow up on this thread if you want more information.
Customer: replied 1 year ago.
HiSorry. That wasn't my question.My question is thisMy income for the tax year April 2015 to April 2016 will be £65,000 by PAYEI have started a business. If I pay salaries from my own pocket can I self-declare and reduce my overall income to allow me to get child benefit?Thanks
Expert:  bigduckontax replied 1 year ago.
You will still get tax benefit but 'You may have to pay a tax charge if you or your partner’s individual income is over £50,000. This is known as the ‘High Income Child Benefit Charge’ [same source]. If your overall income is reduced by the means you suggest then you might well avoid the High Income Child Benefit Charge.
Customer: replied 1 year ago.
But is that allowed?As part of my self declaration
Expert:  bigduckontax replied 1 year ago.
If you are running a self employment business then the wages you pay out are allowable against the income of the business. Obviously that does not apply to wages that you are paying yourself from the business, these are merely drawings and out with the tax computation.
Customer: replied 1 year ago.
Sorry.My income is predominantly from my PAYE earnings. Gros 65000, net approximately 36000.Can I put that money into my business and use it to pay salary and then self declare on that basis?Thanks
Expert:  bigduckontax replied 1 year ago.
You can register for self employment and then use the money as seed capital for your business and pay salaries to third parties. However, unless you actually trade such expenditure will not be available to offset profits. In fact HMRC might well class it as tax evasion.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.