Free Childcare: Adjusted Net Income

mybestattempt

kinger101 said:

mybestattempt said:

Hondadudepro said:

I am in a similar situation so share this confusion. Any wisdom or experience from the good people on here greatly received.

I was told did not have reasonable expectation of having ANI of £100,000 or less. 

Last couple of years always managed the ANI through salary sacrifice arrangements of pension contributions, holiday buy back and now company car. Unless I have misunderstood how benefits count towards ANI. Always left plenty of fat in my calculations. 

This year they made the decision. I challenged and provided evidence I was able to amend my pension payments, I am about to buy a house in next month and so interest from savings to be wiped out so asked for mandatory review. The outcome of which they now inform me will be to stand by original decision and still reject. 

Now all I am left with is option for tribunal, which may require attending in person. 

All this over something that is deemed to potentially happen in the future and not established as fiscal statement of fact! 

Anyone had any luck with the tribunal route? 

P.s I know these things are all relative, but going from £150 a month to £750 in childcare costs is quite the dent. 

Just my thoughts but I would feel inclined to pursue an appeal to tribunal.

For £600 each month, in my view, it would be worth taking the time, if necessary, to attend a hearing.

My understanding is that you must not expect your ANI to exceed £100k to be eligible:

https://www.gov.uk/hmrc-internal-manuals/tax-free-childcare-technical-manual/tfc11050

If you do take an appeal to tribunal HMRC will need make a detailed submission setting out the facts and relevant legislation to convince a judge that you are wrong to expect your ANI to be less than £100k.

You appear to be confident you can provide oral (and documentary) evidence to a tribunal that you do have a reasonable expectation that your ANI will be less than £100k. 

As I say just my thoughts, others may disagree.

Being as ANI can be adjusted on the last day of the tax year (potentially later if a charitable donation and election made on tax return).  Might be hard to document what's happening in the future but if the nursery hours are claimed erroneously or fraudulently,
HMRC should seek to reclaim costs rather than make arbitrary judgements on limited evidence that potential deprive people of their entitlement.

That's why the legislation refers to what the person "expects" their ANI to be for the relevant tax year. 

The legislation at Regulation 15(1) of the Childcare Payments (Eligibility) Regulations 2015 is, to me very clear, that it if the person does not expect their ANI to exceed £100k then they are treated as meeting the income condition for eligibility.

If the person/appellant tells the tribunal that they monitor/review their income throughout the tax year and make the adjustments/action necessary (at any point in time during the relevant tax year) to ensure their ANI does not exceed £100k, my view is that HMRC would have great difficulty (on the balance of probability) to prove otherwise.

kinger101

mybestattempt said:

kinger101 said:

mybestattempt said:

Hondadudepro said:

I am in a similar situation so share this confusion. Any wisdom or experience from the good people on here greatly received.

I was told did not have reasonable expectation of having ANI of £100,000 or less. 

Last couple of years always managed the ANI through salary sacrifice arrangements of pension contributions, holiday buy back and now company car. Unless I have misunderstood how benefits count towards ANI. Always left plenty of fat in my calculations. 

This year they made the decision. I challenged and provided evidence I was able to amend my pension payments, I am about to buy a house in next month and so interest from savings to be wiped out so asked for mandatory review. The outcome of which they now inform me will be to stand by original decision and still reject. 

Now all I am left with is option for tribunal, which may require attending in person. 

All this over something that is deemed to potentially happen in the future and not established as fiscal statement of fact! 

Anyone had any luck with the tribunal route? 

P.s I know these things are all relative, but going from £150 a month to £750 in childcare costs is quite the dent. 

Just my thoughts but I would feel inclined to pursue an appeal to tribunal.

For £600 each month, in my view, it would be worth taking the time, if necessary, to attend a hearing.

My understanding is that you must not expect your ANI to exceed £100k to be eligible:

https://www.gov.uk/hmrc-internal-manuals/tax-free-childcare-technical-manual/tfc11050

If you do take an appeal to tribunal HMRC will need make a detailed submission setting out the facts and relevant legislation to convince a judge that you are wrong to expect your ANI to be less than £100k.

You appear to be confident you can provide oral (and documentary) evidence to a tribunal that you do have a reasonable expectation that your ANI will be less than £100k. 

As I say just my thoughts, others may disagree.

Being as ANI can be adjusted on the last day of the tax year (potentially later if a charitable donation and election made on tax return).  Might be hard to document what's happening in the future but if the nursery hours are claimed erroneously or fraudulently,
HMRC should seek to reclaim costs rather than make arbitrary judgements on limited evidence that potential deprive people of their entitlement.

That's why the legislation refers to what the person "expects" their ANI to be for the relevant tax year. 

The legislation at Regulation 15(1) of the Childcare Payments (Eligibility) Regulations 2015 is, to me very clear, that it if the person does not expect their ANI to exceed £100k then they are treated as meeting the income condition for eligibility.

If the person/appellant tells the tribunal that they monitor/review their income throughout the tax year and make the adjustments/action necessary (at any point in time during the relevant tax year) to ensure their ANI does not exceed £100k, my view is that HMRC would have great difficulty (on the balance of probability) to prove otherwise.

This is the key point I think.

HMRC now seem to be deciding based on what they think rather than what the individual thinks.

A large number of people with the potential to exceed the 100K ANI leave it to March to ensure this doesn't happen.  

If the taxpayer makes the declaration, they should go on this