Benefits, National Insurance and Tax

Did you know that you can get Child Benefit if you’re responsible for bringing up a child who is under 16, or under 20 if they stay in approved education or training?

Only one person can get Child Benefit for a child and there are no limits as to how many children you can claim for. By claiming Child Benefit, you can get:

• an allowance paid to you for each child – you’ll usually get it every 4 weeks
• National Insurance credits which count towards your State Pension
• a National Insurance number for your child without them having to apply for one – they’ll usually get the number shortly before they turn 16 years old

If you choose not to get Child Benefit payments, you should still make a claim to get the other advantages.

More information about Child Benefit, and how to claim this payment, can be found here: Child Benefit: How it works

High Income Child Benefit Charge

If you or your partner earn over £60,000, you need to be aware of the High Income Child Benefit Charge

You may have to pay the High Income Child Benefit Charge if you or your partner have an individual income that’s over £60,000 and either:

• you or your partner get Child Benefit
• someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep

It does not matter if the child living with you is not your own child.

Does it apply to me?

To work out if your income is over the threshold, you’ll need to work out your ‘adjusted net income’. Your adjusted net income is your total taxable income before any allowances and not including things like Gift Aid. Your total taxable income includes interest from savings and dividends.

We would encourage you to use the Child Benefit tax calculator to get an estimate of your adjusted net income, especially if you are in receipt of any additional allowances as a result of your Service e.g. if you have been deployed, as this may affect your total earnings.

More information about Service allowances can be found in JSP 752 Tri-Service Regulations for Expenses and Allowances:

Did you know that you could pay less tax by applying for Marriage Allowance? If eligible, the non-serving partner can transfer a proportion of their allowance to their other half. To apply, you must be married or in civil partnership, one of you must earn less than £12,750 and the other must be a basic rate taxpayer. You can register at any point in tax year.

Universal Credit (UC) is a benefit being rolled out to replace the old legacy benefit system, including Housing Benefit; and UC now includes a housing costs element. This is to help with living costs for lower income families. You can use this free benefit calculator to find out what you may be entitled to claim. 

• NFF news (13th March, 2018)

The NFF is delighted that Defence Secretary Gavin Williamson has announced his intention to counter the Scottish Government’s income tax rise that affects thousands of Royal Navy and Royal Marines (RN/RM) personnel in Scotland. 

  

This issue was raised with us by many RN/RM families located in Scotland and we advocated on their behalf to the MOD and Government. We are pleased that they have listened. 

  

On 21 February 2018, the Scottish Parliament ratified their income tax rates and thresholds applying to Scottish taxpayers. As a result those Service personnel earning more than £26,000 would pay more tax in comparison to their counterparts in the rest of the UK. Scotland plays a key role in the defence of the UK and its contribution is set to increase. Some 1,400 submariners will move to HM Naval Base Clyde by 2020, creating the new single home of the entire UK Submarine Service. 

  

• Update (19th July, 2018) 

Since this article was published in March 2018, a new compensation scheme has been announced in Mid-July 2018 for those who are affected by the increase in Scottish tax rates. 

Specified Adult Childcare Credits – these National Insurance (NI) credits were introduced from April 2011. You may be entitled to receive these NI credits if you are a grandparent, or other family member, who cares for a child under 12, usually whilst their parent (or main carer) is working. These credits are only available from April 2011 and you must make an application to receive the NI credits. 

Do you know you can save up to £2000 per child, increasing to £4000 a year if a child is disabled a towards help with your childcare costs? If you are eligible to get Tax-Free Childcare, you’ll need to set up an online account. For every £8 you pay into this account, the government will pay in £2 to use to pay your childcare provider.  

 

Top Tips 

• You can get Tax-Free Childcare at the same time as 30 hours free childcare (England only) if you’re eligible for both. 
• You will need to have a TFC account to be able to claim for Wraparound Childcare (WAC). Our childcare section holds a wealth of information. 

Class 1 credits are available for periods spent overseas accompanying your serving person since 6 April 2010. They can help to protect your entitlement to the State Pension and other benefits such as the new-style jobseekers’ allowance. These can be applied for four months before returning from overseas, and you should apply before the end of the tax year following the tax year when the posting ended. A tax year runs from 6 April to 5 April. 

Class 3 credits are available for any period you spent overseas accompanying your serving person from assignments on or after 6 April 1975. There is no time limit for claiming. These protect your entitlement to the State Pension only.