High Income Child Benefit Charge

sheramber

The form to complete for child benefit states

The information below only applies to you if your, or your partner’s, individual income is more than
£50,000 a year. If it doesn’t apply, go straight to page 2 and fill in this claim form.
Important information if you or your partner have an individual income of
more than £50,000 a year
If either you or your partner have an individual income of more than £50,000 a year, then the partner with the higher income has
to pay Income Tax on some, or all of the Child Benefit you receive. The tax is known as the ‘High Income Child Benefit Charge’...........................

Until recently there was no link between the Income tax office and the Child Benefit Office. Neither office had access to nor shared information.

It was only once they stated sharing information that HMRC have been able to identify cases affected.

raptor8

Hi
Just read your post which was very helpful, thanks. Not like alot of others. You said the first person you spoke to was helpful and said you wouldnt have to pay penalties, but the second person was the opposite. We received a letter end of Sept, the same as you, but seems we will be having to pay back all payments £2.5k per year for years. So I now need to find 7500 which I dont have. Did you ever manage to set up a payment plan and did you incur any fees or penalties? thanks in advance..

astreet3

Well I'm yet another one joining the list of people affected by this. I received a letter from HMRC just over a week ago and it really was the first I'm aware of hearing about the HICBC.



I totally accept that ignorance is no defence and I believe there must have been an advertising campaign but I do not recall hearing about it at all. I would not have ignored it having suffered through being over paid child tax credits and the pain of sorting that out I would of course have notified them of my earnings had I realised.


What I find particularly frustrating is that it is only now, 5 years after it's introduction, that they are sending letters out to people!! Surely, rather than the money they spent on advertising it originally they could have used those funds to pay for letters to all people earing over the £50k limit thereby directly addressing those affected or likely to be.


I used the online calculator and submitted the figures to HMRC along with proof of separation from my ex-wife. They have replied very quickly to say my figures are correct and that they will be reducing the amount for 2017 due to the separation and of course not charging me for this year as it's not me who was claiming the CB. Still comes to over £3000 which is tough to find in my current situation.



One thing to note, they also say they would not be charging penalties. So as others have said recently it seems that there is at least an informal amnesty on the penalties (maybe only if you co-operate promptly!). I'll wait until I receive the paperwork (separate letters per year) to be sure and also to confirm how I can pay it back.

fleetingmind

What is the best way to know if you went over the £50k in the past years since this was introduced? P60?

My 'Total For Year' on P60's have been lower than £50k until my latest one which as now gone over that. Is this definitive thing to use and covers bonuses and tax on things like private healthcare & pension contributions? (I'm PAYE)

Is a Self Assessment easy to do?
What would I have to pay back on on £56k?

Thanks.

xylophone

You need to look at "adjusted net income"

https://www.gov.uk/child-benefit-tax-charge

Have you tried the calculator in link above?

And see https://www.theguardian.com/money/2017/sep/09/pension-pot-claw-back-child-benefit-tax-change

greatkingrat

fleetingmind wrote: »

What is the best way to know if you went over the £50k in the past years since this was introduced? P60?

My 'Total For Year' on P60's have been lower than £50k until my latest one which as now gone over that. Is this definitive thing to use and covers bonuses and tax on things like private healthcare & pension contributions? (I'm PAYE)

Is a Self Assessment easy to do?
What would I have to pay back on on £56k?

Thanks.

If you have private healthcare / company car etc you should get a P11D each year as well as your P60, you would need to add the two figures together to get your total. If the pension contributions were taken from your payslip then they should already be taken into account in the P60 figure.

Dazed_and_confused

As an employee the tax return should be pretty straightforward to complete, maybe half hours work max once you've got the relevant paperwork together.

If the £56k is your "adjusted net income" then it will be 60% of the Child Benefit. This obviously depends on how many children child benefit is being paid and whether it was paid for the full tax year.

fleetingmind

xylophone wrote: »

You need to look at "adjusted net income"

https://www.gov.uk/child-benefit-tax-charge

Have you tried the calculator in link above?

And see https://www.theguardian.com/money/2017/sep/09/pension-pot-claw-back-child-benefit-tax-change

I have tried it yes but in the 2017 to 2018 period my salary changed twice and so did my pension contributions. So makes it tricky to state salary and monthly pension contributions.

Plus I assume a P60 takes into account any bonuses so when it asks you for a bonus amount do you need to enter this?!

BoGoF

As has previously been said you need to establish if your pension contributions are deducted from gross or net pay. If gross then your P60 figure takes account of your pensiin contributions.

Assuming your bonus was taxed as normal with your salary then your P60 should reflect this - is it showing on your payslips?

fleetingmind

Thank you. Yes both my bonus and pension deductions are on my pay slips.