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

zagfles

dori2o wrote: »

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
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.

Ah yes - they tried the same where I used to work many years ago, trying to bring in "scripts" for handling phone calls from customers. Complete and utter bulls**t, trying to tell professionals to follow a script rather than using their many years of experience and skill to deal with customer problems & queries.

Customer satisfaction was very high before, it went down with this change, and the moronic managers trying to bring in this change were out on their ears and we went back to dealing with customers professionally!:)

isasmurf

The amount of the High Income Child Benefit Charge to which a person is liable is the appropriate percentage of the amount of Child Benefit received

The appropriate percentage is the lower of 100% and that calculated using the following formula

(Adjusted Net Income - £50,000) / £100

This is not disputable - it is what is laid down in legislation.

waccamole

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.

It was a member of tax staff I spoke to - child benefit helpline having been no help at all.

dori2o

Hope this helps.

- Media Lauch will take place 27/28 October

- The meaning of partner for the purpose of High Income Child Benefit Charge is as follows.
- Married/Civil partner living together
- A man and woman or same sex couple, who are not married/civil partners, living together as though they are married/civil partners.


- Adjusted net income (ANI) = Net Income before tax (Total gross from all sources – expenses, professional fees, allowable expenses from profts, etc etc)

LESS

Grossed up Gift Aid, Grossed Up Pension Contributions

- For the purposes of calculating the charge, the ANI is rounded DOWN to the nearest £100. For example and ANI of £53476 will be rounded down to £53400.

- Those who are liable for the charge and wish to continue to receive the Child benefit payments must register for Self Assessment before 5/10/2013 if they are not already registered.

- Those customers who have a PAYE income substantial enough to collect the charge, can ask to have the charge included in their tax code (They must however still complete an annual SA return)
The code will be updated on or soon after 10/04/2013 when the PAYE system has been updated to include the required functionality.

- Although payments may stop, or all the child benefit be recovered, Entitlement to Child Benefit remains whilst the individual meets the criteria. Therefore those who qualify will still be able to claim NI credits.

System

"Those who are liable for the charge and wish to continue to receive the Child benefit payments must register for Self Assessment before 5/10/2013 if they are not already registered"

This was the bit in the training that really annoyed me.
What I wanted to know was does that mean SA1's being issued to child benefit customers to prompt them to register for self-assessment?
Will self-assessment penalties be imposed in "failure to notify" cases?
Will the child benefit issue something like a P60/end of year letter confirming how much was paid out or a letter at the beginning of the year confirming how much the payments are going to be in the coming year?

Haven't found an answer to any of them yet.:(

dori2o

Pam17 wrote: »

"Those who are liable for the charge and wish to continue to receive the Child benefit payments must register for Self Assessment before 5/10/2013 if they are not already registered"

This was the bit in the training that really annoyed me.
What I wanted to know was does that mean SA1's being issued to child benefit customers to prompt them to register for self-assessment? No, the letter and leaflet being issued to child benefit claimants tells them to either print off the SA1 from the website, or to phone the self assessment helpline.
Will self-assessment penalties be imposed in "failure to notify" cases? Yes. The responsibility to register lies with the individual, and as part of the finance act this is now a notifiable change for SA.
Will the child benefit issue something like a P60/end of year letter confirming how much was paid out or a letter at the beginning of the year confirming how much the payments are going to be in the coming year? No, they don't need to. Child benefit is a fixed amount, and for those with an income over £50k the system will be able to calculate the entitlement. I would assume that the new SA form will include boxes similar to the ones that were in the form for 2001/2002 and 2002/2003 when Childrens Tax Credit was issued as tax relief rather than as a direct payment. The form included boxes for childrens name and date of birth etc so the system knew how much relief to give as that again was a fixed figure.

Haven't found an answer to any of them yet.:(

Hope this helps.

John_Pierpoint

The sensible advice for most mothers has been "hang onto the allowance and let HMRC try to get it back off the man in your life". That is enough of a problem for couples in emotionally stable and financially successful relationships.
I well remember marvelling at the financial position of a couple for whom I used to babysit (50 years ago!).
Back then it was unusual for the trophy wife to bother to work on a career of her own. What percentage of WAGS these days graft at their own career, rather than become experts in shopping and coffee?
Anyway the house was a bit chaotic but the three kids were lovely, as the working wife did not concentrate on housework. (one of the girls went on to become a household name).

However it pained the husband that wife's (net) contribution barely paid for the child care, as in those days the joint income was taxed, so the marginal rate for the wife was well over 66%.

Now we are heading back to joint assessment, bad enough for the stable middle class marriage, but a large percentage of children are no longer living in the household of their biological father, unlike the situation in the 1960s.

I am not sure this fact of life has been clearly explained to Gideon and his HMRC chums; It is looking like that unlike the Child Support Agency, HMRC will have to go after the "step father" (possibly known within the family as "uncle" Jimmy) to get the benefit money back?!?.

This should be entertaining.

The BBC explains the pitfalls here
http://www.bbc.co.uk/programmes/b01nk14f

Tell me:
Were my daughter (and her two kids) to be deserted by her husband and were she to move back into my household (and assuming I was lucky enough to enjoy an income of £60k ), would the tax man come after me for the return of child allowance?

dori2o

John_Pierpoint wrote: »

The sensible advice for most mothers has been "hang onto the allowance and let HMRC try to get it back off the man in your life". That is enough of a problem for couples in emotionally stable and financially successful relationships.
I well remember marvelling at the financial position of a couple for whom I used to babysit (50 years ago!).
Back then it was unusual for the trophy wife to bother to work on a career of her own. What percentage of WAGS these days graft at their own career, rather than become experts in shopping and coffee?
Anyway the house was a bit chaotic but the three kids were lovely, as the working wife did not concentrate on housework. (one of the girls went on to become a household name).

However it pained the husband that wife's (net) contribution barely paid for the child care, as in those days the joint income was taxed, so the marginal rate for the wife was well over 66%.

Now we are heading back to joint assessment, bad enough for the stable middle class marriage, but a large percentage of children are no longer living in the household of their biological father, unlike the situation in the 1960s.

I am not sure this fact of life has been clearly explained to Gideon and his HMRC chums; It is looking like that unlike the Child Support Agency, HMRC will have to go after the "step father" (possibly known within the family as "uncle" Jimmy) to get the benefit money back?!?.

This should be entertaining.

The BBC explains the pitfalls here
http://www.bbc.co.uk/programmes/b01nk14f

Tell me:
Were my daughter (and her two kids) to be deserted by her husband and were she to move back into my household (and assuming I was lucky enough to enjoy an income of £60k ), would the tax man come after me for the return of child allowance?

No. Assuming the parent is not of an age where their parents are still responsible for them, then just as in cases where a single parent living with their parents, they can claim Tax Credits based on their income only and not the grandparents income.

The rule is as I stated above.

The meaning of partner for the purpose of High Income Child Benefit Charge is as follows.
- Married/Civil partner living together
- A man and woman or same sex couple, who are not married/civil partners, living together as though they are married/civil partners.

zagfles

dori2o wrote: »

Will the child benefit issue something like a P60/end of year letter confirming how much was paid out or a letter at the beginning of the year confirming how much the payments are going to be in the coming year? No, they don't need to. Child benefit is a fixed amount, and for those with an income over £50k the system will be able to calculate the entitlement. I would assume that the new SA form will include boxes similar to the ones that were in the form for 2001/2002 and 2002/2003 when Childrens Tax Credit was issued as tax relief rather than as a direct payment. The form included boxes for childrens name and date of birth etc so the system knew how much relief to give as that again was a fixed figure.

They can't work out how much child ben was paid in all cases just from dates of birth etc, eg say a child over 16, who left education and got a job half way through doing A levels. Or a child who lived with an ex-partner for part of the year etc.

What about 50/50 care where a step-parent may not know whether his partner, or his partner's ex, is claiming the child ben.

Also what would happen where parents earning similar amounts split up? Say parents split in May and neither has done their tax return for the previous tax year, how does parent A know whether or not their income will be higher than parent B for the previous tax year, and so whether they'll be liable to the charge?

dori2o

zagfles wrote: »

They can't work out how much child ben was paid in all cases just from dates of birth etc, eg say a child over 16, who left education and got a job half way through doing A levels. Or a child who lived with an ex-partner for part of the year etc.
There will likely be a box on the return form, for such an eventuality. Until the new form is issued in April next year we won't know.

What about 50/50 care where a step-parent may not know whether his partner, or his partner's ex, is claiming the child ben. Only 1 person is in receipt of Child benefit in 50/50 care cases, it isn't split between the 2 of them. therefore it will only apply to the household in receipt of ChB.

Also what would happen where parents earning similar amounts split up? Say parents split in May and neither has done their tax return for the previous tax year, how does parent A know whether or not their income will be higher than parent B for the previous tax year, and so whether they'll be liable to the charge?

There will be a specialist unit set up at the ChB Office for such eventualities that will deal with these cases.

I'm not saying this is the right way to go about it. I'm trying to give helpful information to those who this may affect. If you have a problem with the policy I'm not the person to be venting your frustrations at. Your MP's contact details can be found on the web.

IMO, the easiest way to sort this problem is to get rid of the ChB office and add the current ChB to Tax Credits/Universal Credits. Therefore it is paid correctly at the time of issue rather than having it affect peoples tax codes/self assessments.