Child benefit higher earnings

kerr82

Is anyone in this situation? My partner received a letter saying he owes £3800 in child benefit overpayment for the last 7 years, they want it by the end of the month. Trying to get on the phone is impossible. How do we appeal this? We were made aware earlier in the year he was over the earnings limit so I stopped claiming, they never said we would have to pay anything back at that point. They're not even offering a payment plan and won't accept credit cards. Why weren't we told 7 years ago that he was over the limit then. Funny thing is he pays more tax now on the higher earnings and we're worse off each month than if he was just under the threshold!! 

poppy12345

You're not the only person. This was welll published when it first started in 2013. There is no appeal against this charge.

https://www.gov.uk/government/publications/high-income-child-benefit-charge-data/high-income-child-benefit-charge

sheramber

Try phoning as soosn as lines open. Start dialling a couple of minutes before so you are at the front of the queue. 

You may fond some personnel have started work early and will answer before the official opening time.

NedS

kerr82 said:

 Why weren't we told 7 years ago that he was over the limit then.

Unfortunately paying the right amount of tax is ultimately your responsibility. HMRC are merely responsible for collecting the tax from you.

calcotti

kerr82 said:

...so I stopped claiming, ..

If you still have children under 12 and if you are not earning or are earning less than £120/week you may wish to continue claiming in order to get NI credits towards your future State Pension. You can claim but ask not to be paid which means no tax charge arises.

GeordieGeorge

kerr82 said:

Is anyone in this situation? My partner received a letter saying he owes £3800 in child benefit overpayment for the last 7 years, they want it by the end of the month. Trying to get on the phone is impossible. How do we appeal this? We were made aware earlier in the year he was over the earnings limit so I stopped claiming, they never said we would have to pay anything back at that point. They're not even offering a payment plan and won't accept credit cards. Why weren't we told 7 years ago that he was over the limit then. Funny thing is he pays more tax now on the higher earnings and we're worse off each month than if he was just under the threshold!! 

It’s your responsibility on this one to know whether you are able to claim or not. If you’ve claimed when not eligible then yes, it’s a pain, but there’s no appeal against the repayment. If I were you I I’d pay it from your emergency fund, have a mild grumble, and move on. For a couple where one is on over £50,000 per hear it’s not really an appreciable sum, so yes, it’s annoying, but not worth getting too worked up over.

peteuk

kerr82 said:

Is anyone in this situation? My partner received a letter saying he owes £3800 in child benefit overpayment for the last 7 years, they want it by the end of the month. Trying to get on the phone is impossible. How do we appeal this? We were made aware earlier in the year he was over the earnings limit so I stopped claiming, they never said we would have to pay anything back at that point. They're not even offering a payment plan and won't accept credit cards. Why weren't we told 7 years ago that he was over the limit then. Funny thing is he pays more tax now on the higher earnings and we're worse off each month than if he was just under the threshold!! 

I am sure there is a way you can avoid the extra tax, of course tax avoidance although not illegal some would say is immoral.  I looked at my next promotion and worked out it wasn't worth it.  However although its plain the higher your earn the more you pay in tax, but other than the £3800 I'm not sure how your worst off.

Wage £49,999 pays 20% between £12,000 and £49,999  - take home £30,400
Wage £50,0001 pays 20% between £12,000 and £49,999 and then 40% over £50,001 so your only paying 40% on the £2.00  - take home £30,400.60

*please note fiqures and tax allowance rounded down for simplicity. 

sheramber

The higher income charge was introduced in January 2103, so over 7 years ago.

Details of publicity here

https://www.gov.uk/government/publications/high-income-child-benefit-charge-data/high-income-child-benefit-charge#:~:text=The High Income Child Benefit Charge ( HICBC ) was introduced in,or whose partner gets it.

Alice_Holt

kerr82 said:

Is anyone in this situation? My partner received a letter saying he owes £3800 in child benefit overpayment for the last 7 years, they want it by the end of the month. Trying to get on the phone is impossible. How do we appeal this? We were made aware earlier in the year he was over the earnings limit so I stopped claiming, they never said we would have to pay anything back at that point. They're not even offering a payment plan and won't accept credit cards. Why weren't we told 7 years ago that he was over the limit then. Funny thing is he pays more tax now on the higher earnings and we're worse off each month than if he was just under the threshold!! 

        Consider increasing pension contributions in the future to reduce taxable pay.    An absolute no-brainer if he pays 40%.     Had you done this you would have been much better off over the last 7 years, with increased pension savings and no overpayment to make now.

        https://adviser.royallondon.com/technical-central/pensions/state-benefits-pension-manuals/child-benefit-avoiding-the-tax-charge/

      Btw there has been a recent case on this topic which may offer you some hope. Try goggling for more details.

Jim80

I was also hit by this charge going back 5 years and for a different reason. I knew of this higher earnings charge however it also applies to benefit-in-kind payments, in my case medical insurance even when you don't see the cash is classed as part of your pay package and should be included, even when its on a different form which you never see unless you fill in a tax return or pay attention to it. When I got a pay rise I actually stopped getting the CB as I knew I would be over but they take payments over the year and even if you receive it for say 2 months and then only start to earn over the 50k mark AFTER you stop getting CB you have to pay back the overpayment on those 2 months!

There is no way to appeal this, you either earned over 50k or you did not. Maybe they have the wrong figures and you can fix it for that reason, but you said over the earning limit so assume 60k (otherwise you may as well claim the difference between 50-60k) so you won't have much hope.

Anyway, I had to pay back the overpayment + interest + a fine. Even if they are convinced that you did this accidently, which they agreed I did, the fine was like £250 and the interest was added each year. I had to pay this back immediately (3k) for anything pre the current year and then they added the current year into my next tax year by changing my tax code (another 2k). When I stopped CB apparently they do not tell HMRC, who then continued to take back all the overpayment even when I was not claiming it, so watch out for that one as well. I did claim this back however. Of course, I am a single parent of 4 earning 52k at the time, jumping up after a new job getting hit for payment when a couple earning 98k between themselves pay nothing. Such is life...

Side note, usually they want a lump sum but you can talk to them, they would rather get the money directly rather than having to go through debt collection...

https://www.gov.uk/repay-child-benefit-overpayments