Stopped Child Benefit payments - HMRC say otherwise and want more back

rob_cb

So, yesterday I received a letter from HMRC saying I made a mistake in my tax return (year ended Apr 2019) and decided I need to pay the Higher Income Child Benefit charge as I received £1076, based on information from the Child Benefit office. Given the deadline to pay is this week, I have added funds to my tax account to cover the disputed balance.

The thing is, I asked HMRC to stop Child Benefit payments in May 2018, which was confirmed by a letter from the Child Benefit office at the same time.

Facts:
1) Previous tax years, I was receiving Child Benefit payments. I have paid the high income charge as my income was between £50-£60k for the previous few years.
2) In Apr 2018, I asked HMRC to stop payments as I knew my income would be £60k. The last payment I received was in May 2018.
3) For tax year 2018-19, I only received £103 in Child Benefit payments, not £1076 they say I owe.
4) My parner's total income was £20k higher than mine last year. The £103 was correctly declared on my partner's tax return.

I've sent a letter explaining the above and attached a copy of my child benefit letter and hoping common sense will prevail.


What I want to know is whether anyone who stopped Child Benefit payments also had problems with their tax return and HMRC demanding money from nothing?

Icequeen99

It appears that in this case HMRC have used their powers to make a correction to the tax return that was submitted. You can appeal that adjustment if you think it is incorrect (it isn't clear who you sent the letter to). There is some guidance on tax appeals here: https://www.litrg.org.uk/tax-guides/tax-basics/when-things-go-wrong/tax-appeals

IQ

rob_cb

Thanks, yes, the letter stated they can correct "obvious errors" under Section 9ZB Taxes Management Act (TMA) 1970.

Their letter told me to telephone or write to the HMRC office at the top of the letter (Indv and Small Business Compliance) if I didn't agree with the correction, within 30 days. So I chose to respond in writing and I'm hoping the copy of the Child Benefit letter I enclosed, confirming HMRC stopped payments, will be sufficient.

The tax appeal page looks useful if for some reason HMRC still don't believe me!

calcotti

If needsbe copies of bank statements from before and after payments stopped would provide further evidence that payments did in fact stop.

Dazed_and_confused

To be honest I don't think the op needs to prove anything with regard to the payments stopping.

4) My parner's total income was £20k higher than mine last year. The £103 was correctly declared on my partner's tax return.

As I'm sure the op is aware "income" doesn't really matter when it comes to HICBC, it is adjusted net income which is relevant.

And if the op means his partner had the higher adjusted net income then the op wouldn't be liable for the HICBC irrespective of any payments made.

I'm assuming there is no other party involved and the correction relates to the child/partner the op is referring to in this thread.

rob_cb

Good news (I think). The extra tax I paid is now showing as unallocated in my tax account and available for refund, implying I don't owe it any more. I just need to wait for their letter to explain themselves.