Do I have to pay the interest added onto the child benefit owed because of the high income

HUGO66

Hi, 
I've trawled the Internet but cannot find an answer. We have been hit by the child benefit high income overpayment. We owe £10500. £500 of this is interest added on. We have taken a loan out but been unable to contact hmrc to pay what we owe. The interest is being added on daily. £10 in under a week.
I really feel as we were unaware of this, and only one person is working, earning over 60k and I am unable to work and get PIP for my various disabilities.
Does anyone know if we can get away with paying the interest we have been charged. We're already struggling to pay the loan and all our other outgoings. Hmrc offered us a repayment plan which we couldn't afford which is why we've ended up with a loan.
Why when we are paying it all back should we also be penalised this way? 

Dazed_and_C0nfused

Highly unlikely.

It isn't a penalty, it is to reflect the fact that you (or your spouse/partner) has had use of the  when Child Benefit when HMRC should have had it.

If you get charged an actual penalty then other posters have had some success arguing against those but it will depend on the circumstances.  

HUGO66

Thanks for your reply. We didn't get charged the penalty as they were happy we werent aware of the changes. It's just interest. But at £5 per day

Dazed_and_C0nfused

It isn't £5/day though is it, it's a % of the amount owed.

The interest will be less the more you pay off.

If you have taken out a loan have you actually paid this over to HMRC yet?  If not why not?

Current and previous rates charged are here,

https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates

badmemory

HUGO66 said:

We have taken a loan out but been unable to contact hmrc to pay what we owe.

They don't like to make this easy!

Dazed_and_C0nfused

badmemory said:

HUGO66 said:

We have taken a loan out but been unable to contact hmrc to pay what we owe.

They don't like to make this easy!

If the op can see that interest is increasing daily they are probably looking at a Self Assesment account. 

I don't know of any particular problem with being able to make payments against your Self Assessment account.

Not if you actually want to make the payment.