Massive tax bill (reposted)

dae14867

Hi
I received a very large bill from HMRC yesterday for not completing a self assessment for child benefit from 2013 until the present date. The bill stated i owe £18,000. 
In previous  posts I have spoken about my ongoing financial problems and my unhealthy relationship with money. 

I am completely at a loss with this as I had absolutely no idea I was supposed to complete a self assessment as any tax owed was paid from paye. 

This coupled with some rather unsavoury comments on this board has left me feeling extremely low and worried about what happens next. 

I plan to talk to HMRC tomorrow but my expectations are low. 

Can I ask what options I have bearing in mind this and other posts I have on here. 

Many thanks 

Dazed_and_C0nfused

Firstly have you checked the calculations are 100% correct?

The High Income Child Benefit Charge is based on your adjusted net income so any personal pension contributions would help reduce that and you may also be due some higher rate tax relief.

You may be able to make an arrangement to pay this back over a period of time.  But be realistic, for HICBC to be due you must have had a decent income so HMRC aren't going to accept just any offer.

Browntoa

The earlier thread

https://forums.moneysavingexpert.com/discussion/comment/78200240#Comment_78200240

Has had the original text edited out of it by the op

For some reason.

oxroxx

I was in a similar position a few years ago due to my ignorance of the High Income Child Benefit Charge. (although not owing anywhere near 18k)
I was in the fortunate position of paying the bill in one hit.

My colleague at work, however, told me HMRC changed his tax code until the debt was paid.
You will have to pay this back but you may not have to pay all in one go.

Also, I found that it was easier to write down all my questions and have all my financial paperwork (p60's) before phoning.
If you find the advisor isn't very helpful (I was cut off several times, and passed around quite a bit) just hang up and try again. There are some great advisors who will help you get through this.

Best wishes.

dae14867

Dazed_and_C0nfused said:

Firstly have you checked the calculations are 100% correct?

The High Income Child Benefit Charge is based on your adjusted net income so any personal pension contributions would help reduce that and you may also be due some higher rate tax relief.

You may be able to make an arrangement to pay this back over a period of time.  But be realistic, for HICBC to be due you must have had a decent income so HMRC aren't going to accept just any offer.

From 2013 - 2016 my salary was £42,000 - £45,000 so even if I did know about self assessment I wouldn’t have completed it. I have since discovered that my salary from HMRCs view includes car and medical insurance so it does take it over £50k by some way. 

Looking at other years and checking P60s their figures are out a bit but still over £50k. 

What I don’t understand is the figure that they are asking for is way over what I have been sent by them over the year. For instance i get £140 per month and they are saying I owe £2500 for that tax year. It makes no sense. 

I am currently on 58,000 and in a right mess. I have a company car and a salary sacrafice vehicle for my wife and medical insurance I don’t even use. I am receiving some universal credit as my wife is working and I’m not even sure if I should be getting that. I have queried it and they say it’s based on my payroll so not to worry. This child credit and the possibility I will have to pay back UC is making me feel ill. I’m at my wits end 

Teahfc

Have you any paper work or e mails from UC stating you are getting the benefits and for what reasons.
Don’t bury your head in the sand, ignore the snide remarks on the forum there is a hardcore of very knowledgeable posters take note of them, and please get it sorted as it is not going away.
You are fortunate to be earning above average salary just use it to get sorted financially. 👍🏻

theoretica

PAYE is so convenient - until it isn't.  I know other people where the child benefit thing caught them out, but not for as long so a much easier sum to pay back.  Is the £18k all child benefit and interest or are there penalties in there too? It is worth checking HMRC's calculations (which will help you see how they work to do them in future) - the first thing to do is probably to get online access to your account and check the data there matches what you have.

As well as sorting out 2013 to present remember to sort this out going forward, either filling in a tax return every year (you will need to do this for this year) or cancelling the child benefit claim.

Billy_B_North

You are fortunate in that you are on a very high wage, so with the right attitude, and the right changes, you should be in a position to pay this back.

As above, check the calculation first, and see if you agree with it.

Next, have you anything that you can sell to cover the demand; a car, motorbike etc?

If not, can you post up a statement of affairs, showing you what’s coming in and going out each month? You’re on £50,000 per year, does your partner work too? Can either of you take on a second job, or additional hours?
Are you a home owner, and do you have equity in your home?

dae14867

theoretica said:

PAYE is so convenient - until it isn't.  I know other people where the child benefit thing caught them out, but not for as long so a much easier sum to pay back.  Is the £18k all child benefit and interest or are there penalties in there too? It is worth checking HMRC's calculations (which will help you see how they work to do them in future) - the first thing to do is probably to get online access to your account and check the data there matches what you have.

As well as sorting out 2013 to present remember to sort this out going forward, either filling in a tax return every year (you will need to do this for this year) or cancelling the child benefit claim.

Thanks for your reply. 

What I can’t understand is why they still pay child benefit if you are over £50k. They have access to my salary. And why leave it so long to advise me, reading on the forum this seems quite common.  

p00hsticks

dae14867 said:

theoretica said:

PAYE is so convenient - until it isn't.  I know other people where the child benefit thing caught them out, but not for as long so a much easier sum to pay back.  Is the £18k all child benefit and interest or are there penalties in there too? It is worth checking HMRC's calculations (which will help you see how they work to do them in future) - the first thing to do is probably to get online access to your account and check the data there matches what you have.

As well as sorting out 2013 to present remember to sort this out going forward, either filling in a tax return every year (you will need to do this for this year) or cancelling the child benefit claim.

Thanks for your reply. 

What I can’t understand is why they still pay child benefit if you are over £50k. They have access to my salary. And why leave it so long to advise me, reading on the forum this seems quite common.  

One reason is that in some (many ?) instances, a couple consists of a high earner and a stay at home parent - if the child benefit is payed to the stay-at-home parent, then (until the youngest child turns twelve) they will get accompanying National Insurance credits that will count towards their state pension.

Also historically it was a way of enusring that the stay at home parent (usually the mother) had access to at least some money rather than having to rely on hand outs from the earning parent.

I beleive there is an option to continue with the credits only if preferred in cases where the whole amount of child benefit paid would simply be claimed back from the higher earner.  

Alice_Holt

dae14867 said:

Dazed_and_C0nfused said:

Firstly have you checked the calculations are 100% correct?

The High Income Child Benefit Charge is based on your adjusted net income so any personal pension contributions would help reduce that and you may also be due some higher rate tax relief.

You may be able to make an arrangement to pay this back over a period of time.  But be realistic, for HICBC to be due you must have had a decent income so HMRC aren't going to accept just any offer.

I am currently on £58,000... I am receiving some universal credit as my wife is working and I’m not even sure if I should be getting that.

     That sounds very odd to me - UC on a salary of £58k.
     UC looks at joint income, so you wife working would reduce the chance of receiving UC not increase it.
     Who made the UC claim? 
     Have you checked that the details on the UC payments schedule in the UC journal are correct?
    You are right to be concerned about UC, as all overpayments are recoverable regardless of official error.
    Have you put your income into a benefit calculator to check UC entitlement?
     https://www.gov.uk/benefits-calculators   

As other posters have said you need to get a detailed breakdown of the £18k and check it carefully, then when you are satisfied the amount is correct agree a repayment plan with HMRC.    
 https://taxaid.org.uk/guides/taxpayers/tax-debt/time

 HMRC are not the most forthcoming with information, so you may need to request a SAR https://www.gov.uk/guidance/hmrc-subject-access-request