Child Benefit

fluffnutter

Apologies if this has been asked before...

With regard the Jan 2013 changes to eligibility for child benefit, how will HMRC link my husband and me? AFAIK we're separate entities in terms of taxation at the moment, so how does HMRC know that Ms Fluff Nutter who claims child benefit and earns nothing lives with someone who earns £X?

I read an article about the changes and it raised more questions than it answered! It said that from next month 1.2 million people will receive letters advising they may no longer be entitled to child benefit and what to do next. How are these 1.2 million people selected? Are they merely those earning more than £50K? In which case, many of them won't be claiming child benefit (because they don't have children). Therefore, there's a legitimate opportunity to
simply ignore the letter. Is HMRC really relying on people's honesty?

Sorry if I'm being dense but I don't see how this is going to work...

xylophone

https://forums.moneysavingexpert.com/discussion/comment/56717493#Comment_56717493
Discussed in thread above.

fluffnutter

Thanks xylophone. Some useful information in that thread, particularly around net adjusted income and salary sacrifice. I'm still a little unsure about the answer to the original question - how do HMRC tie an earner to someone claiming child benefit?

Is it simply a case of 'Dear Taxpayer, you earn over £50K. Please 'fess up as to whether you live with someone who claims child benefit, Yours HMRC'.

Now, I'm a law-abiding type (as is my husband) and we'd not try to defraud the government. But are they really introducing this policy and basing determining eligibility on people's honesty alone?

dori2o

fluffnutter wrote: »

Thanks xylophone. Some useful information in that thread, particularly around net adjusted income and salary sacrifice. I'm still a little unsure about the answer to the original question - how do HMRC tie an earner to someone claiming child benefit?

Is it simply a case of 'Dear Taxpayer, you earn over £50K. Please 'fess up as to whether you live with someone who claims child benefit, Yours HMRC'.

Now, I'm a law-abiding type (as is my husband) and we'd not try to defraud the government. But are they really introducing this policy and basing determining eligibility on people's honesty alone?

This question was asked of senior hMRC staff back at the start of this month, so far we are yet to get a reply.

I can ony assume they will use the same processes they are using to investigate those who are potentially defrauding the Tax Credits, i.e. held address details, credit reference reports etc, using the information held on their own systems.

There will probably also be some form of requirement for individuals to 'fess up' as you put it, and with that will probably be penalties etc should you intentionally avoid the claiming back of the benefit via paye/self assessment.

As yet nothing has been confirmed and probably won't be until the letters are issued from 3rd November onwards.

fluffnutter

dori2o wrote: »

This question was asked of senior hMRC staff back at the start of this month, so far we are yet to get a reply.

I can ony assume they will use the same processes they are using to investigate those who are potentially defrauding the Tax Credits, i.e. held address details, credit reference reports etc, using the information held on their own systems.

There will probably also be some form of requirement for individuals to 'fess up' as you put it, and with that will probably be penalties etc should you intentionally avoid the claiming back of the benefit via paye/self assessment.

As yet nothing has been confirmed and probably won't be until the letters are issued from 3rd November onwards.

... and that would only be cost-effective if fraud was already suspected (or advised on the 0800 snitch line). It simply wouldn't be a sensible use of HMRC staff time to check out every person claiming child benefit to see if they're partnered with someone earning over £50K.

The ways you mention are interesting too. Address details only give you a flavour of what's likely, not a definitive answer. The earner in my household could be my brother, or I could live separately from my husband. Both are fairly unlikely of course, but I'm just trying to demonstrate that HMRC can't be certain that a relationship exists based on address alone. As for credit reference agencies, provided you have no shared financial products (and I don't) then this won't reveal anything either.

This policy relies so much on people's honesty that it makes me think that the government's incredibly naive in trying to implement it.