Tax return due to child benefit - both partners or just highest earner?

timmys

Hi,

I crossed into the higher rate tax threshold last year so had to do a self assessment tax return for the first time.

This year my wife is now also a higher rate tax payer and earns more than me. Do we both have to do a tax return or just her?

Apologies if this is a stupid question but looking at gov.uk it tells me she is responsible for paying as the higher earner, but not if she is the only one required to do a return.

Thanks.

sheramber

seems quite clear

Who pays the tax charge

If your adjusted net income is over £50,000 and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge.

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

timmys

I'm not asking who is responsible for paying it, I'm asking if we both need to do a self assessment return or just the higher earner.

daveyjp

Whoever earns most needs to submit the return as the amount of child benefit to be returned is based on that figure.

There is no issue with both of you doing returns (anyone can do one at any time) especially as there has been a change of who will be paying the child benefit charge.

HMRC may advise the lower earner they no longer need to submit a return, if they don't continue to do so.

sheramber

timmys said:

I'm not asking who is responsible for paying it, I'm asking if we both need to do a self assessment return or just the higher earner.

But the only way the higher earner can be notified of the charge due is by  completing a self assessment return. 

Yes, the higher earner could pay the lower earner's bill but they could not be held responsible for payment , if it was not paid., as it was not in their name.

timmys

daveyjp said:

Whoever earns most needs to submit the return as the amount of child benefit to be returned is based on that figure.

There is no issue with both of you doing returns (anyone can do one at any time) especially as there has been a change of who will be paying the child benefit charge.

HMRC may advise the lower earner they no longer need to submit a return, if they don't continue to do so.

Thank you!

I actually just got through on the phone to HMRC and the initial answer was indeed that only the higher rate payer needs to do the return as if we both returned them we would both be asked to pay the child benefit charge.

I then questioned whether I should just ignore the "your tax return is due" messages and the advisor then said she would go in and put a nil return on my file for this year with a note as to why. She then said whoever is earning the least each year should do a nil return that year - which I guess contradicts the initial advice that only the higher rate payer needs to do the return!

daveyjp

HMRC advice was correct, but only if you completed the self assessment incorrectly.

As you will only fill in the child benefit received information on one of the returns (the highest earner) you both can't be charged.

From the form:

High Income Child Benefit Charge

Please read the notes before filling in this section. Only fill in this section if all of the following apply:

• your income was over £50,000

• you or your partner (if you have one) got Child Benefit (this also applies if someone else claims Child Benefit

for a child who lives with you and pays you or your partner for the child’s upkeep)

• couples only – your income was higher than your partner’s

sheramber

timmys said:

daveyjp said:

Whoever earns most needs to submit the return as the amount of child benefit to be returned is based on that figure.

There is no issue with both of you doing returns (anyone can do one at any time) especially as there has been a change of who will be paying the child benefit charge.

HMRC may advise the lower earner they no longer need to submit a return, if they don't continue to do so.

Thank you!

I actually just got through on the phone to HMRC and the initial answer was indeed that only the higher rate payer needs to do the return as if we both returned them we would both be asked to pay the child benefit charge.

I then questioned whether I should just ignore the "your tax return is due" messages and the advisor then said she would go in and put a nil return on my file for this year with a note as to why. She then said whoever is earning the least each year should do a nil return that year - which I guess contradicts the initial advice that only the higher rate payer needs to do the return!

Only the higher rate earner needs to complete a return is correct.

But HMRC will require a return to be filed if you are asked to do so. There are other reasons for needing to  complete a return.

For convenience, if you complete a return one year HMRC will automatically issue one the next year unless they know one is not required.

But  only the one with the higher income would complete the  child benefit section.

As you have told them you do need to complete a return they have noted the records accordingly.

A person who has received income cannot  submit  nil return as they are signing that it is a true statement of their income.

They would have to contact HMRC to get the record updated.

Dazed_and_C0nfused

timmys said:

I'm not asking who is responsible for paying it, I'm asking if we both need to do a self assessment return or just the higher earner.

Strictly it would be both of you, you be size you will have been sent a notice to file a return and your wife as she is the one liable to HICBC.

But if you no longer you meet the criteria for completing a return you can get HMRC to withdraw the return.

There can be some downsides to this, particularly for higher rate payers, but on the whole people generally seem to prefer not to complete the return if it isn't strictly necessary anymore.