HMRC help please? Child Benefit Charge plus underpaid tax?

Nene

Hello,

Settle in folks, this might be a long one. But I will do my best to condense so you don’t drop off.

At the beginning of the year my husband received a letter from HMRC saying we’d been overpaid child benefit in 2022. He registered for self-assessment within the time on the letter (past the self-assessment deadline but within the letter deadline), went through the self assessment form (totally ridiculous for someone on PAYE when it’s for child benefit), and it came back and said he’d not paid £11k plus in tax that was still owed. This was the exact amount of tax he’d already paid so we assumed it was a glitch and that it had just worked it out again. As obviously the Self-assessment isn’t for people on PAYE really.

We then get a letter demanding that amount of tax but £3000 plus of overpaid child benefit. Now. With charges for it not having been paid already. We tried calling numerous times, eventually got through after 2 hours waiting only to be told he owed more tax and it cut off. Not helpful.

I wrote a complaint to Tier 1 asking for an explanation and explaining very clearly what had happened and querying both the amount they said he owed in income tax, but also the child benefit charge, as according to the tool on their own website that should only be £888. Only.

During all of this my husband found out he’s being made redundant, I’ve had significant health stuff going on, and the stress is insane.

I wrote again asking for more clarification as their first response was rubbish and even more confusing. I wrote to Tier 2 complaints as per their complaints pathway, and still got a response from Tier 1. I then rang to try and make a payment or set up a payment plan as the letters keep coming with even more charges for non-payment. We do not have £15k just lying around. This was not an expected tax bill. I couldn’t set up a payment plan because we have joint income and I didn’t have the figures for just his share of the bills, so when I first ran through we didn’t have enough, on the second run through I overshot with my guesstimates and they wanted £500 a month and wouldn’t accept any less than that. So, I paid £50 and now need to make another payment to save it from going to debt collectors.

Everything in me says this is wrong. I’ve got no doubt from what’s been said that we owe them some money back for the child benefit, but I don’t see how it’s as much as they say. I also object massively to them adding on the fees when we’re still in dispute over this. If this was any other financial company it feels like they’d be a whole lot less aggressive and more understanding and actually try and answer the questions I’ve raised as opposed to just relying on the fact it’s the HMRC. It doesn’t feel like there’s much we can do about it, but that seems wrong too.

I don’t know where we take this, but it feels so very wrong and unfair that HMRC just get to (seemingly) stick a finger in the air and come up with a figure and we’re meant to just pay it with no recourse and no real way of checking whether it's correct.

Does anyone have any suggestions? We don’t qualify (obviously) for a lot of the Tax help charities, and I’m struggling with headspace enough to find someone to take it on, I don’t even know where to look or what to do next.

I appreciate we’re in a very fortunate position that we are in this bracket, but that doesn’t mean we’re rolling in it and have this money just lying around. The future is also VERY uncertain right now and this is a very scary time.  I would really appreciate any help or advice on what to do going forward, or does nobody beat the HMRC and we should just save ourselves this particular battle and cough up and take the hit from the redundancy pay? 

Thank you, if you got this far. 😊

Dazed_and_C0nfused

went through the self assessment form (totally ridiculous for someone on PAYE when it’s for child benefit), and it came back and said he’d not paid £11k plus in tax that was still owed. This was the exact amount of tax he’d already paid so we assumed it was a glitch and that it had just worked it out again. As obviously the Self-assessment isn’t for people on PAYE really

Not quite sure where to start but Self Assessment is done by millions of people each year, lots of whom will be on PAYE and have that as their only or main source of (taxable) income.

You/he seem to have ignored the "Self" in Self Assessment.

Did he include the PAYE tax deducted by his employer during the tax year in question?  Did it not occur to him that this could be the problem he'd created?  Did he sanity check the return before submitting it to make sure it made sense?

MattMattMattUK

Nene said:

Hello,

Settle in folks, this might be a long one. But I will do my best to condense so you don’t drop off.

At the beginning of the year my husband received a letter from HMRC saying we’d been overpaid child benefit in 2022. He registered for self-assessment within the time on the letter (past the self-assessment deadline but within the letter deadline), went through the self assessment form (totally ridiculous for someone on PAYE when it’s for child benefit), and it came back and said he’d not paid £11k plus in tax that was still owed. This was the exact amount of tax he’d already paid so we assumed it was a glitch and that it had just worked it out again. As obviously the Self-assessment isn’t for people on PAYE really.

We then get a letter demanding that amount of tax but £3000 plus of overpaid child benefit. Now. With charges for it not having been paid already. We tried calling numerous times, eventually got through after 2 hours waiting only to be told he owed more tax and it cut off. Not helpful.

I wrote a complaint to Tier 1 asking for an explanation and explaining very clearly what had happened and querying both the amount they said he owed in income tax, but also the child benefit charge, as according to the tool on their own website that should only be £888. Only.

During all of this my husband found out he’s being made redundant, I’ve had significant health stuff going on, and the stress is insane.

I wrote again asking for more clarification as their first response was rubbish and even more confusing. I wrote to Tier 2 complaints as per their complaints pathway, and still got a response from Tier 1. I then rang to try and make a payment or set up a payment plan as the letters keep coming with even more charges for non-payment. We do not have £15k just lying around. This was not an expected tax bill. I couldn’t set up a payment plan because we have joint income and I didn’t have the figures for just his share of the bills, so when I first ran through we didn’t have enough, on the second run through I overshot with my guesstimates and they wanted £500 a month and wouldn’t accept any less than that. So, I paid £50 and now need to make another payment to save it from going to debt collectors.

Everything in me says this is wrong. I’ve got no doubt from what’s been said that we owe them some money back for the child benefit, but I don’t see how it’s as much as they say. I also object massively to them adding on the fees when we’re still in dispute over this. If this was any other financial company it feels like they’d be a whole lot less aggressive and more understanding and actually try and answer the questions I’ve raised as opposed to just relying on the fact it’s the HMRC. It doesn’t feel like there’s much we can do about it, but that seems wrong too.

I don’t know where we take this, but it feels so very wrong and unfair that HMRC just get to (seemingly) stick a finger in the air and come up with a figure and we’re meant to just pay it with no recourse and no real way of checking whether it's correct.

Does anyone have any suggestions? We don’t qualify (obviously) for a lot of the Tax help charities, and I’m struggling with headspace enough to find someone to take it on, I don’t even know where to look or what to do next.

I appreciate we’re in a very fortunate position that we are in this bracket, but that doesn’t mean we’re rolling in it and have this money just lying around. The future is also VERY uncertain right now and this is a very scary time.  I would really appreciate any help or advice on what to do going forward, or does nobody beat the HMRC and we should just save ourselves this particular battle and cough up and take the hit from the redundancy pay? 

Thank you, if you got this far. 😊

First, which tax years? The, in teach tax year, what did he earn gross and how much Income Tax and National Insurance was paid in each year, what pension contributions did he make and how much Child Benefit was paid in those years.

I suspect as Dazed has said, he completed the self assessment wrong, which has led to the tax calculation.