More confused than ever about child benefit taxation after talking to HMRC!

Cook_County

zagfles wrote: »

Some aspects of tax are hard. This isn't. I would suggest anyone who is incapable of issuing a correct memo on this aspect of the change is immediately sacked for incompetance! It's their job to understand, they've had 7 months to understand it. How will they ever cope with any complex piece of tax legislation if they can't understand this?

I do not think this is a fair comment. A system that will require well over half a million more of the population to file self-assessment tax returns and requires major computer re-programming by two government departments (and new forms, and lots of training and so on) is not straightforward.

zagfles

Cook_County wrote: »

I do not think this is a fair comment. A system that will require well over half a million more of the population to file self-assessment tax returns and requires major computer re-programming by two government departments (and new forms, and lots of training and so on) is not straightforward.

The admin of it might be hard. Understanding the percentage that will be charged, as discussed above, isn't.

chrismac1

In my view George Osborne is Labour's greatest asset. We're going to get the real time information and the child benefit fiascos playing out in 2013 and 2014.

In this country some votes are worth a lot more than others. A voter in a seat like Sunderland is wasting his or her time bothering, for example. The folk who are going to be the main victims of the latest muck-ups, in my view, will be over-represented in marginal seats in the south and under-represented in no-hoper seats in Sunderland and Scotland.

So if it turns out as badly as I fear there is more than just HMRC heads who'll be heading for the baskets.

zagfles

chrismac1 wrote: »

In my view George Osborne is Labour's greatest asset. We're going to get the real time information and the child benefit fiascos playing out in 2013 and 2014.

In this country some votes are worth a lot more than others. A voter in a seat like Sunderland is wasting his or her time bothering, for example. The folk who are going to be the main victims of the latest muck-ups, in my view, will be over-represented in marginal seats in the south and under-represented in no-hoper seats in Sunderland and Scotland.

So if it turns out as badly as I fear there is more than just HMRC heads who'll be heading for the baskets.

:rotfl:you really live on a different planet! The vast majority of marginal seats in the South, outside London, are Tory/LibDem marginals. How do you think they'll swing?

There is no political problem with this change, even if the admin goes wrong. In fact the govt might even want it to, as it'd keep what is a massively popular policy in the headlines. Even some staunch "always voted Labour, father before me and father before him always voted Labour" tribal types like this policy. It's not going to cost the govt votes. It will gain them votes if anything. Even if HMRC totally screw it up.

dori2o

zagfles wrote: »

Are HMRC now staffed with utter morons, or have they got a mole trying to sabotage things :rotfl:

I can understand confusion about some aspects of this change. What is "adjusted net income" exactly. What happens when partners get together/split mid tax year. What is a "partner". What happens if one partner refuses to tell the other how much child ben they get. Etc.

But the percentage of the charge was made blatently clear in the budget and the finance bill.

http://www.hm-treasury.gov.uk/d/fb2012_ootlar.pdf

http://www.legislation.gov.uk/ukpga/2012/14/schedule/1/enacted

The charge is 1% of the child ben received for every £100 earned over £50,000. It is 100% for incomes of £60,000 or more.

Some aspects of tax are hard. This isn't. I would suggest anyone who is incapable of issuing a correct memo on this aspect of the change is immediately sacked for incompetance! It's their job to understand, they've had 7 months to understand it. How will they ever cope with any complex piece of tax legislation if they can't understand this?

The problem is, as hard as it may seem to understand, not all HMRC staff are tax trained.

Those who work predominantly with Tax credits won't be tax trained. They may have an idea about it, and may help out in busy SA periods doing simple work such as issuing forms, or helping with employment pages etc, but they won't know about the majority of taxes processes.

The same with people who work on the Child Benefit line, they won't have any idea about taxes. they deal with Child benefit and the payment of it. they are not trained in how this is going to be reclaimed, simply because they don't need to be. It is taxes staff that are, once the process has been agreed which currently it hasn't, going to be administering the tax charge.

So the staff member from Child benefit is probably giving out the only information they have, which is the information they have been told to give.

It may say HMRC on the letters, but they are all different departments, dealing with different aspects of HMRC's business span.

As for having 7 months to understand it, that quite simply is not the case. The first memo regarding the change was issued on 2nd October, that was quickly replaced with another memo on the 5th October and another on the 11th.

It may have been announced in the budget, but nothing more had been said to frontline staff until recently.

waccamole

zagfles wrote: »

OK fair enough, it could be the OP misunderstanding, but he was left with the impression child benefit would be added to his income and taxed (ie he'd only lose 40% max of it) rather than the tax code fiddled to collect the amount due (as you described).

Nope - no misunderstanding. Despite my initial difficulties, I'm reasonably switched on!

The nice young man was quite clear and stuck to his guns even when repeatedly challenged.

waccamole

EvieSaver wrote: »

I've just rang the HMRC child benefit help line 0845 302 1444 to get this cleared up.

I asked

"If someone was earning £60,000 would they have to repay the whole amount of child benefit received or would they be taxed on the amount of child benefit received, e.g. at 40% of the amount received"

The answer was

"Only preliminary information has been released so far and some of it is wrong. All we know is that there will be a tax charge on the full amount but we don't know yet at what rate (eg, 40% or 100%)". The first letters will be received on 3rd November and there will be a link on the HMRC website from around this date.

I was not told what information is wrong.

So, I cleared that up no end.:rotfl:

That's who I tried speaking to a couple of weeks ago and was asked what I was worrying about as it doesn't come in till January!

Seriously though - feel sorry for the front line staff.

zagfles

dori2o wrote: »

The problem is, as hard as it may seem to understand, not all HMRC staff are tax trained.

Those who work predominantly with Tax credits won't be tax trained. They may have an idea about it, and may help out in busy SA periods doing simple work such as issuing forms, or helping with employment pages etc, but they won't know about the majority of taxes processes.

The same with people who work on the Child Benefit line, they won't have any idea about taxes. they deal with Child benefit and the payment of it. they are not trained in how this is going to be reclaimed, simply because they don't need to be. It is taxes staff that are, once the process has been agreed which currently it hasn't, going to be administering the tax charge.

Point taken - but then why are child benefit staff trying to answer questions they don't understand? They should be passing people like the OP through to taxes staff who can answer their question.

So the staff member from Child benefit is probably giving out the only information they have, which is the information they have been told to give.

It may say HMRC on the letters, but they are all different departments, dealing with different aspects of HMRC's business span.

As for having 7 months to understand it, that quite simply is not the case. The first memo regarding the change was issued on 2nd October, that was quickly replaced with another memo on the 5th October and another on the 11th.

It may have been announced in the budget, but nothing more had been said to frontline staff until recently.

HMRC as an organisation have had 7 months, so why were memos issued so late and then incorrectly? Surely someone at HMRC could understand and issue correct information to the rest of the staff before now? Or maybe a group of them - some from child benefit, some from taxes, and also some tax credits staff who will understand assessing people jointly, identifying partners, household breakups etc.

How did they cope with all the changes made in the early years of the last govt - from Family Credit to WFTC & childrens tax credit to WTC & CTC all in a space of a few years. Massive change compared to this.

Dazed_and_confused

Does this help?

http://www.hmrc.gov.uk/manuals/pommanual/PAYE14015.htm

dori2o

zagfles wrote: »

Point taken - but then why are child benefit staff trying to answer questions they don't understand? They should be passing people like the OP through to taxes staff who can answer their question.

HMRC as an organisation have had 7 months, so why were memos issued so late and then incorrectly? Surely someone at HMRC could understand and issue correct information to the rest of the staff before now? Or maybe a group of them - some from child benefit, some from taxes, and also some tax credits staff who will understand assessing people jointly, identifying partners, household breakups etc.

How did they cope with all the changes made in the early years of the last govt - from Family Credit to WFTC & childrens tax credit to WTC & CTC all in a space of a few years. Massive change compared to this.

Thats part of the reason why things tend to go wrong.

HMRC is no longer run by people who know the business, it's runj by people from, mainly, private industry and banking who don't have a clue how tax or benefits work.

They try and bring in processes commonly seen in the banking industry, especially in contact centres, but the 2 types of work couldn't be more different.

Unfortunately this isn't how it gets reported and it's always the front-line staff that take the blame for all HMRC's problems, and the management don't do anything to put peoples opinions right, they're more than happy to sit in their ivory towers, with their unjust, yet substantial salaries, happy in the knowledge the 'plebs' are taking the blame for their !!!! up.

As for why is the person at Child benefit giving advice/ They're probably reading, as they have been told to do, what was said to the OP from a memo. In fact I'm pretty sure that almost word for word, this

Only preliminary information has been released so far and some of it is wrong. All we know is that there will be a tax charge on the full amount but we don't know yet at what rate. The first letters will be received on 3rd November and there will be a link on the HMRC website from around this date.

is what was on the latest information passed to front line staff as the response to give to people who phone and ask.

There are many people who know how this is going to work and can explain it as I have. There is only one problem, that is not the recognised process and to explain as i have to someone on a phone call means that the adviser is not using the current CTP (Call type process, or script, another useless process brought into taxes from the banking sector) for this type of call, and if that is picked up in coaching then the adviser is penalised for it. Whether or not the information they have given is correct, it is not what is stated on the CTP.