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  • FIRST POST
    • Helz123
    • By Helz123 7th Aug 17, 12:47 PM
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    Helz123
    Late Penalty charges due to overpayment of Child benefit
    • #1
    • 7th Aug 17, 12:47 PM
    Late Penalty charges due to overpayment of Child benefit 7th Aug 17 at 12:47 PM
    I think I have read one or two other posts on here regarding late penalty charges for self assessment on tax returns. My husband earned over the £50,000 threshold in years 2014/2015, 2015/2016 and 2016/2017. I was claiming child benefit during these years and had not realised that as he went over the earning that he was meant to complete a self assessment tax return. Although we are not disputing that we should pay back the child benefit, we did not receive any notifications of any need to complete a tax return at all until around May of this year so how can they say it was late if we did not realise it was something that needed to be done. We have already set up a direct debit to pay back the debt from the first year, this is £257 a month, we are finding this quite difficult to pay back but after phoning HMRC they said as we agreed to this amount we can't change it. Also one this amount is paid back we will still owe over £3000 which will be due in full. They don't really seem very willing to help us. All we wanted to do was bring the payments slightly lower to make it more manageable and not keep getting late penalties when like I said before we were never notified of any of this before May of this year.


    Just in case people think we are well off this is not the case. We used all of my husbands earnings on an extension we built and at the moment our daughter, son in law and 2 nearly 3 children are all living with us while they save for a mortgage. We are not in financial difficulty but had paid off our overdraft quite recently and now this is putting us back into it again.


    So would we be able to appeal the late penalties at all? Why are the people that you ring in HMRC just so harsh? Nobody seems willing to help or accept we know we should pay the money owed back. Also it is so frustrating that 2 people earning £49,000 in a household can still claim Child Benefit, who the hell came up with that rule???? How is that fair? Anyway I have since cancelled the child benefit of course.
Page 2
    • Tax Headache
    • By Tax Headache 5th Dec 17, 3:27 PM
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    Tax Headache
    Exactly the same has happened to me.
    No real change in my circumstances over recent years - only thing that has changed is the new rules applicable from Jan 2013. Surely there has to be some reasonable expectation that such changes need to be communicated directly and not simply rely on Media Ad Campaigns ??
    Now faced with more than £5k of over-payments plus Interest / Penalties being charged at 10% and 20% because I deliberately failed to notify HMRC and the excessive time that has lapsed!! Situation = Crazy.


    Take a look at the Charter on Gov.uk -
    1.2 "keep any costs to a minimum" - charging 20% interest for a debt I knew nothing about ??
    1.7 "charge interest and penalties where appropriate and be reasonable in how we use our powers"
    2.1 obligation on the taxpayer to "give us all the relevant facts and information ...we ask you for"


    Can anyone offer advice on whether HMRC can reasonably charge interest / penalties in this instance ?? Also is there any duration beyond which taxes cannot be reclaimed in this way ??
    • badmemory
    • By badmemory 5th Dec 17, 7:26 PM
    • 1,347 Posts
    • 1,601 Thanks
    badmemory
    From what I have read over the last few months HMRC no longer believe that the Charter applies!
    • Dazed and confused
    • By Dazed and confused 5th Dec 17, 7:34 PM
    • 2,182 Posts
    • 998 Thanks
    Dazed and confused
    According to gov.uk HMRC only charge 3% interest not 10% (and it was only 2.75% last year).

    https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates

    Not sure you have much chance with the interest as that is merely reflecting the fact that you've had the benefit of the money but penalties may be different?
    • Popsicle18
    • By Popsicle18 3rd Jan 18, 8:10 PM
    • 2 Posts
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    Popsicle18
    Please can you advise if you managed to set up a monthly pay plan for child benefit charge and what period they let you pay it over? We’ve just been hit with a £3K bill plus £500 penalties ......
    • dori2o
    • By dori2o 4th Jan 18, 10:47 PM
    • 7,455 Posts
    • 12,405 Thanks
    dori2o
    Exactly the same has happened to me.
    No real change in my circumstances over recent years - only thing that has changed is the new rules applicable from Jan 2013. Surely there has to be some reasonable expectation that such changes need to be communicated directly and not simply rely on Media Ad Campaigns ??
    Now faced with more than £5k of over-payments plus Interest / Penalties being charged at 10% and 20% because I deliberately failed to notify HMRC and the excessive time that has lapsed!! Situation = Crazy.


    Take a look at the Charter on Gov.uk -
    1.2 "keep any costs to a minimum" - charging 20% interest for a debt I knew nothing about ??
    1.7 "charge interest and penalties where appropriate and be reasonable in how we use our powers"
    2.1 obligation on the taxpayer to "give us all the relevant facts and information ...we ask you for"


    Can anyone offer advice on whether HMRC can reasonably charge interest / penalties in this instance ?? Also is there any duration beyond which taxes cannot be reclaimed in this way ??
    Originally posted by Tax Headache
    They (taxpayers) are notified.

    The Gov. uk website contains all of this information.

    The penalty charged is likely not for late submission but for failing to notify HMRC of your requirement to submit a tax return/that you have circumstances which mean there is additional tax to pay. These penalties are referred to as 'Failure to notify' and are generally equivalent to a % of the tax due for the year(s) in question and generally depend on whether HMRC believe the failure to notify has been deliberate. These penalties can rise to as much as 100% of the tax due depending on the severity of the failed disclosure.

    There is no statute of limitation on the collection of tax due. In the most serious cases of failed disclosure and evasion HMRC have used their powers to go back in excess of 20 years.

    If you disagree the penalty then write in to appeal/object and give your reasons for not notifying HMRC that you needed to file a tax return. Generally the reason of 'I didn' t know I had to...... ' is not an acceptable reason as each individual is solely responsible for ensuring they make the necessary notifications to HMRC within the timescales set in legislation.

    For anyone who should have completed returns for those years but has not yet done so, nor has been contacted by HMRC about it, they should notify HMRC asap to make the notification. By doing this you would have a better chance of reducing/avoiding any penalties rather than waiting for HMRC to discover the failure to notify.
    Last edited by dori2o; 05-01-2018 at 1:01 AM.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • garsam12
    • By garsam12 29th Jan 18, 2:52 PM
    • 4 Posts
    • 2 Thanks
    garsam12
    > who the hell came up with that rule????
    The answer is simple: people who hate children, British people and UK future. Please have a look at the statistics portal: statista com /statistics / 270370 / age-distribution-in-the-united-kingdom/: The number of people in 0-14 age category has shrunk from 17.83% in 2006 to 17.62% in 2016. The number of people in 15-64 age category has shrunk from 66.05% to 64.03% for the same period, while the number of elderly people is steady growing from 16.12% to 18.35%. That means that during next 14 years we will have even more elderly people and less people of working age, which will encourage government either increase pension age or invite more immigrants of working age into the country. What smart government would do? They will support middle class families with very young children. What would do government who hate people? They will support low income families and attack middle class families with young children. Children from low income families can see very clear message: there is no reason to earn more than £50000 a year, otherwise they will lose all the benefits. The less they earn officially, the more support they will receive. I see no any other explanations why conservative government has attacked specifically families with household income around £60000 a year. Phrase "this will affect less then xx% of the populations" should be translated as "we will discriminate xx% of the population" and the reason for that discrimination have no explanations.

    The most vulnerable families are those with one earner. Someone can ask why we have families with only one earner? First of all because childcare costs are so high that one of the
    parents with income less than £20000 have to give up working and sit with very young children (at least until children reach secondary school age). Also there are a lot of families with only one parent. The main earner experiencing very high risks of losing single household income and as result they sit very tight giving up any attempts to change job in order to build up carier. Someone can say that £60000 is a lot of money. In fact it is very far from being truth. First of all they have to pay around £20000 in taxes. Secondly, families with two or three children and one non-working adult need bigger house, which means minimum £12000 a year (rent/mortgage), bigger council tax (around £2400), bigger utilities bills (another £1500). Plus they need two cars: one for the main earner in order to get to/from work and second for another parent (to take children to schools, hospitals, sport sections, etc). That all leaves average family of 4-5 persons with £20000 of net income, which is approximately £56 a day (meal, clothes, school uniform, household and unpredictable expenses). Forget about any support from government - you already "classified" as "high earner". Forget about family holidays or visits to restaurants. Forget stupid advice to sacrifice part of the salary into pension - money are needed now, not in the future and there are no real ways to improve situation until children reach secondary school age. Start learning balance transfer technics and learn experience of living with huge debts.

    Forget about any help or support from HMRC - they only want your money and not willing to provide any help or support. When I have tried to arrange monthly repayments with HMRC they have requested my bank statements and verdict was "We see that you will not be able to afford repayments, so YOU HAVE TO PAY £3000 NOW". I have never heard more stupid answer before...My arguments that I don't have money printing machine and I have reached my credit card limits haven't been heard. Plus they will charge penalty and start charging interest on those penalties, which is not legal in my opinion... Also HMRC have a lot of power - they don't need to go to court, they can simply take money directly from your bank account or arrest your possessions. I have never done anything criminal in my life, I always pay my debts and my credit rating is around 96%. Although I have never claimed child benefits myself and absolutely don't understand why government made me responsible for financial actions of my wife. Now my youngest child is 9 years old, so my wife finally started working again and we started paying off our credit card debts, but I don't understand why I was treated by HMRC that way when I really struggled with finances regardless of my so called "high income". So I had to borrow money from friends and pay those greedy sharks with wishes of slow and painful illness.

    Basically, that rule does simple thing: it redistributes money from most vulnerable families with children (via taxes) to more wealthier families (i.e. those where both parents earn around £50000 or more - they can afford child care, they can sacrifice part of their salaries into pension and still earn together £100000 keeping their child benefits and child tax credits).
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