HMRC payment for higher income child benefit charge

xplosiv77

Hi All, 

I'm hoping someone might be able to help clarify what's going on here.  For the year 2022/23, I completed a tax return due to the need to pay the "high income child benefit charge".  I was told the amount I needed to pay was £500-odd, and so I made the payment as requested via the HMRC website.

I did the "same again" this time around for 23/24 and received a notice that my child benefit charge was £1040, payable by 31 January 2025.  I thought I'd pay it a little closer to the deadline.  However, today, I've received what appears to be a Statement from HMRC now saying that "you have nothing to pay".  The £1040 owing appears on the statement, but then on the entry below it says "Balance payment for 23/24 included in PAYE code for year 25/26" - with the £1040 appearing in the credit column.

My understanding of the above is I can simply not pay the £1040 and the amount owed will be recouped by HMRC by charging me more income tax over the 24/25 financial year.  Is that correct and does it sound normal practice for HMRC to do that rather than seeking a lump sum payment?!  I presume if I were to go ahead and make a payment of £1040 by 31 Jan 2025 anyway, they would pick up on this and adjust my tax code accordingly so I'm not hit by excessive income tax?

Sorry if these are basic questions, but I'm new at having to complete tax returns / dealing with HMRC and just don't want to get it wrong.

Thanks all! 

Dazed_and_C0nfused

You seem to be mixing up your tax years and ignoring a question on the return.

If you want to pay direct you can do but the way you completed your return shows you didn't opt for that.

You can pay the £1040 now (or by 31 January 2025) and then ask HMRC to update things so your 2025-26 tax code isn't adjusted for the £1040.

The £1040 owing appears on the statement, but then on the entry below it says "Balance payment for 23/24 included in PAYE code for year 25/26" - with the £1040 appearing in the credit column.

xplosiv77

Thank you, that's helpful.  I've looked at a copy of the (paper) tax return i submitted and see I failed to tick the box to indicate if i don't want them to obtain the payment by adjusting the tax code for the 25/26 financial year.  

So you think the HMRC's system won't automatically know not to adjust the code if i pay as a lump sum by 31/01/25 and it'll necessitate a telephone call?  

I presume it doesn't make much difference either way whether I choose to pay as a lump sum or over the next year through increased income tax? I guess the latter just means i'll see £87 less in my take-home wage each month...

Dazed_and_C0nfused

xplosiv77 said:

Thank you, that's helpful.  I've looked at a copy of the (paper) tax return i submitted and see I failed to tick the box to indicate if i don't want them to obtain the payment by adjusting the tax code for the 25/26 financial year.  

So you think the HMRC's system won't automatically know not to adjust the code if i pay as a lump sum by 31/01/25 and it'll necessitate a telephone call?  

I presume it doesn't make much difference either way whether I choose to pay as a lump sum or over the next year through increased income tax? I guess the latter just means i'll see £87 less in my take-home wage each month...

Correct.  I think a payment followed by a phone call (or webchat) once that is showing on your Self Assessment account will be needed.

The adjustment has already happened, that's what you put in your original post.  

Balance payment for 23/24 included in PAYE code for year 25/26

You are effectively wanting HMRC to reverse that and just making a payment won't achieve it.

And yes, if you do nothing you can expect a new tax code in early 2025 with the tax owed included, ready for the new tax year.

xplosiv77

Many thanks for clarifying.  That all makes sense.