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Hiya,
First post here, so would like to draw on peoples experiences....
I am going to receive a one off payment of around £4000 as a bonus for a good year.
I earn about £50k and pay £8k maintenance at the moment as everything is PAYE.
Problem is - this payment will take me over the HRT threshold, so I will lose 40% of it in Tax, and 11% in NI ( I think ) - however if I let CMS know about it, they will do their usual and completely mess up their calculation..... but if I were to lose another 16% of it I'd lose over 67% of the payment!
I suspect what they will do is average over 2 months work out I earn an extra £2000 a month and then up the maintenance accordingly! This means I'd pay more in Maintenance over the 12 months than the bonus after tax and NI.....
In reality, it's more like an extra £333 per month I earn - but it's the first time I've had it in 3 years of working here - so I could argue it's £4000 over 36 months - or £111 a month.....
One of the questions they ask when submitting the form is "Do you expect this higher payment will be paid for more than 13 weeks - which of course the answer is no.
But I have absolutely NO confidence at all that this will not get completely messed up. I am on commission which means my salary fluctuates wildly anyhow....
Any suggestions how to handle it. And yes, over a 3 month period, it will up my salary by the 25% they all talk about - but not if assessed over the whole 12 months, then it will only be about 9%..
Suggestions / recommendations please. Do I wait and not declare it (not my preferred choice), Wait 3 months to show it's not a consistent payment and then let them know - or let them know straight away.
I rang them about 4 months ago to ask what I should do and they couldn't tell me. I would think the best way would be to be assessed on it next year... but that means not telling them, which is a breach of the rules...
Thank you.
Hi, yes unfortunately any bonuses,.pay rise or overtime means you have to pay more maintenance. Perhaps you can transfer the bonus into a pension?
I can do that yes - however as I lose 51% of it in Tax and NI I'm worried if I then do £1800 as a pension contribution, I will actually earn LESS that month than I would normally!!!
I am happy for it to be assessed and used as an average for the whole year - my issue is if they assess it over 2 months and use that as an "average" for my "new" wages.....
Yes, sadly its what I am thinking too - I will get a letter from my Employer to point out (truthfully) it's the first time in 3 years I've had it and I am extremely unlikely to ever get it again....
I would suggest to be careful about their 25% tolerance rule. if your income increases by 25% then they expect you to report it to them. if you don't report and e.g. 6 months pass by, they may pick it up then increase and backdate your maintenance payments from the date you received bonus. they are known to do income checks throughout the year, and possibly more if ex partner keeps pushing them for it.
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