MSE News: Higher earner getting Child Benefit? Check if you can pay it back through your tax code

g0009348

Dazed_and_C0nfused said:

What actually seems to be changing now is you can have HICBC provisionally collected via your tax code but don't need to file a tax return (if there is no reason other than HICBC to need to file one).

This is what I wanted to setup, but I was advised this article is wrong, and there is no option currently to have HICBC provisionally collected, without having to submit a self assessment each year.  I find this a pain to do, just for HICBC purposes.  I've had it collected for years through PAYE, but always linked to submitting the self assessment.         Thanks

Dazed_and_C0nfused

g0009348 said:

Dazed_and_C0nfused said:

What actually seems to be changing now is you can have HICBC provisionally collected via your tax code but don't need to file a tax return (if there is no reason other than HICBC to need to file one).

This is what I wanted to setup, but I was advised this article is wrong, and there is no option currently to have HICBC provisionally collected, without having to submit a self assessment each year.  I find this a pain to do, just for HICBC purposes.  I've had it collected for years through PAYE, but always linked to submitting the self assessment.         Thanks

That is 100% definitely going to be possible.

Ridiculous though it might seem I actually think MSE are more likely to be correct than (some) front line HMRC staff.  Sign of the times sadly 😢

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

There is even a service availability page for the new service.

https://www.gov.uk/government/publications/pay-the-high-income-child-benefit-charge-through-paye-service-availability-and-issues/pay-the-high-income-child-benefit-charge-through-paye-service-availability-and-issues

sheramber

According to. https://rayneressex.com/news/paye-and-the-high-income-child-benefit-charge-whats-changing-in-2025/#:~:text=HMRC%20announced%20plans%20to%20introduce,through%20their%20PAYE%20tax%20code.

22ndSeptember

Whilst this was expected to launch in the Summer of 2025, HMRC has not yet confirmed a formal timeline for implementation or any detailed guidance on how the system will operate in practice.

The new system supports HMRC’s ongoing digital transformation and promises to reduce administrative burdens for higher earners taxed entirely through PAYE.

Dazed_and_C0nfused

sheramber said:

According to. https://rayneressex.com/news/paye-and-the-high-income-child-benefit-charge-whats-changing-in-2025/#:~:text=HMRC%20announced%20plans%20to%20introduce,through%20their%20PAYE%20tax%20code.

22ndSeptember

Whilst this was expected to launch in the Summer of 2025, HMRC has not yet confirmed a formal timeline for implementation or any detailed guidance on how the system will operate in practice.

The new system supports HMRC’s ongoing digital transformation and promises to reduce administrative burdens for higher earners taxed entirely through PAYE.

But gov.uk now has that service up and running.

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

g0009348

I'll try again today and reference that gov.uk page.  Will let you all know how I get on

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

BobsDiners

This is great news, but still doesn't address the underlying unfairness of the HICBC.  A couple earning £49999 each get to keep all and yet if one earns £80k and the other earns£19,999 then ALL must be paid back.  Child benefit is not for parents, its for children and in the above example the couple that must pay it back already pay an extra £4160 in combined TAX and NI contributions.

cannycanary

g0009348 said:

Hello - I've just tried to call HMRC and ask about doing this, so I no longer have to submit a self assessment.  They advised this article is wrong, and a self assessment will always be required......

@MSE_Petar

I’ve just called them and had the same advice. They said I will always need to submit a self assessment first before calling to get my tax code updated for PAYE. Have the advisors just not been trained on the new system yet?

Exodi

BobsDiners said:

This is great news, but still doesn't address the underlying unfairness of the HICBC.  A couple earning £49999 each get to keep all and yet if one earns £80k and the other earns£19,999 then ALL must be paid back.  Child benefit is not for parents, its for children and in the above example the couple that must pay it back already pay an extra £4160 in combined TAX and NI contributions.

While I agree and it is a very serious topic of which has been discussed ad nauseam by forumite and politican alike, it's somewhat off-topic. The example that typically gets banded about is two people earning £59,999 (household income of £119,998) gets full child benefit while one working parent and one SAHP earning £80,000 (houshold income of £80,000) get nothing.

The government addressed this very point in their last Autumn Budget: https://www.gov.uk/government/publications/autumn-budget-2024/autumn-budget-2024-html#:~:text=High Income Child Benefit Charge reform,households, especially in times of crisis.

High Income Child Benefit Charge reform, simplification and targeting of economic support to households – The government will not proceed with the reform to base the HICBC on household incomes. This is because it would have come at a significant fiscal cost of £1.4 billion by 2029-30 if setting the threshold to £120,000-£160,000, where no families would lose out.[footnote 123] To make it easier for all taxpayers to get their HICBC right, the government will allow employed individuals pay their HICBC through their tax code from 2025, and pre-prepopulate Self Assessment tax returns with Child Benefit data for those not using this service. The government will also explore how better data use and sharing across government departments can improve the targeting of economic support to households, especially in times of crisis.

sheramber

Dazed_and_C0nfused said:

sheramber said:

According to. https://rayneressex.com/news/paye-and-the-high-income-child-benefit-charge-whats-changing-in-2025/#:~:text=HMRC%20announced%20plans%20to%20introduce,through%20their%20PAYE%20tax%20code.

22ndSeptember

Whilst this was expected to launch in the Summer of 2025, HMRC has not yet confirmed a formal timeline for implementation or any detailed guidance on how the system will operate in practice.

The new system supports HMRC’s ongoing digital transformation and promises to reduce administrative burdens for higher earners taxed entirely through PAYE.

But gov.uk now has that service up and running.

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

HMRC advise otherwise.

From what so have read You have to sign up for digital tax to do it and that is not available for PAYE. 

stayloa

I've just spent an hour on the phone to them (and counting). The chap is very friendly, but keeps directing me to the SA100 form, which as others have said, is just the usual process for completing a tax return and asking for the child benefit to be reclaimed via PAYE.

When I click the link on the "pay-as-you-earn/high-income-child-benefit-charge/registration" page, it says I should pay via my self assessment tax return. I thought the point of calling was to have it recorded that I don't need to do that given the only reason I do the tax return is to pay back the child benefit.

All very frustrating!