High Income Child Benefit Charge

moneymattersnatter

Firstly, thank you for having me in the party!

I was notified in August and after some to-and-froing, have agreed to I (unknowingly) owed money (having crept over £50K following the birth of my second child) in 2013. So, FIVE YEARS OF CHB!!!

I don't disagree to paying it back (although am now out of work so god knows how I'll afford to!).

BUT I do disagree to a penalty. Has anyone got tips for completing the 'Information about your failure to notify' report? Most of the responses on here seem to be 'ignorance is no excuse'.

But... is it?! Are we ALL that ignorant, or can we claim their system (that knows we're paid over £50K AND claiming CHB) is flawed?!

I have to respond by November 8th so any tips greatly appreciated!

TIA

sheramber

Income tax and child benefit are dealt with by two separate offices by two separate organisations with separate computer systems.

There was no link between the two offices so child benefit did not know how much your income was and HMRC did not know if you were claiming child benefit.

It is only recently that information has been shared between the offices hence HMRC now contacting those people affected.

A previous poster reported that no penalty was being charged of you were honest and said you didn't know about it. No idea if that is true.

astreet3

moneymattersnatter wrote: »

BUT I do disagree to a penalty. Has anyone got tips for completing the 'Information about your failure to notify' report? Most of the responses on here seem to be 'ignorance is no excuse'.

TIA

I was honest on the form, simply said that I had no recollection of any advertising about this charge at the time it was introduced and that despite being liable for 5 years worth of charges had received no prior letters about it. I very quickly received an email which confirmed I would not face any penalties.



So my advice would be to be honest, don't make up any excuses. Someone else on here said they believed there was currently some form of informal amensty in place so you may be lucky too. Good Luck!

user1168934

folks, any advice for me?


I never knew or heard about the child benefit tax charge, just came across this thread by chance and have just realized that my taxable income for 2017-18 have exceeded the 50K mark.


I have not received a letter or anything from HMRC yet. I looked at the HMRC website to see how to register and it seems that the deadline (05th Oct.) has now passed.


What should I do now?
Is there going to be any penalties if I register now?
I am happy to pay the tax I am owed, is there any way to avoid penalties?

xylophone

my taxable income for 2017-18 have exceeded the 50K mark.

Have you made any pension contributions/charitable donations? Try the calculator here

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

starkynhutch

The 50k threshold was introduced in 2013. Nearly 5 years ago. The threshold has never been increased. Tax free and tax thresholds have changed but not this threshold. The campaign was years ago and there hasn't been any widely covered campaigns to refresh the understanding of this. There is an ever increasing number of people unaware of this 'trap' - and it really cant be described as anything else. If it went up with inflation then fine but in real terms the threshold is getting lower ever year and more an more people are into this bracket as single earners. Maybe it's time to start a petition to review it.

user1168934

xylophone wrote: »

Have you made any pension contributions/charitable donations? Try the calculator here

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

Thanks. I have tried the calculator already. I made pensions contributions which I have excluded and I got a bonus which I have included and the resultant is over 50K.


One question though, do I have to include the interest I get on my current account balance?



Do you think I should register now or just keep quiet? Is there going to be a penalty?

Dazed_and_confused

One question though, do I have to include the interest I get on my current account balance?

Yes. It's taxable income so needs to be included.

Do you think I should register now or just keep quiet? Is there going to be a penalty?

Well going by this thread HMRC seem quite good at identifying people who need to pay the charge. There will be far more chance of incurring a penalty if HMRC come after you rather than if you are up front and file the tax return(s) for the year(s) you have something to pay.

Sibbers123

user1168934 wrote: »

Do you think I should register now or just keep quiet? Is there going to be a penalty?

No one would advise you to commit fraud.

If you make an unprompted disclosure within 12 months HMRC have the power, and often do reduce penalties to nil.

HMRC will know how much you earn as they receive this information from your employer (and information about interest from your bank) - therefore it is only a matter of time before you do get that brown envelope in the post.

user1168934

Dazed_and_confused wrote: »

Yes. It's taxable income so needs to be included.
.

Thanks mate. The banks do seems to deduct some tax before paying the interest or it is a different interest. Does that not cover the tax liability?