Higher Earner Child Benefit Charge

brednall
brednall Posts: 572 Forumite
First Anniversary Combo Breaker
in Cutting tax
Hi all.

My husband received a letter yesterday from HMRC concerning the Higher Earner Child Benefit Charge.

Until he opened this letter, we knew about this charge at all. We first claimed child benefit in 2010 and added to it when our son was born in 2011. Back then, my husbands wages were not at the £50k threshold and have only reached this in the last 2 years or so.

We have had no communication on anything like this. The actual payments go into my bank, not my husbands but still no communication.

Has anyone had any experience on dealing with this? He is going to call them today to discuss.

Thanks
Baby daughter born Jan 10
Baby son born June 11
«134

Comments

  • yorkiechick
    yorkiechick Posts: 115 Forumite
    First Post Name Dropper First Anniversary
    As your husband earns over the threshold he will be liable for the charge, it doesn't matter who actually receives the child benefit. He will need to submit a tax return for the tax years where his taxable income is over £50,000 and the charge will be calculated through self-assessment. The tax office will then more than likely adjust your husband's tax code to include a restriction for the higher income charge, so it is paid through PAYE but a tax return will still need to be completed each year. If your husband's salary goes above £60,000 you would no longer be entitled to child benefit and any received in that tax year would need to be repaid.
  • brednall
    brednall Posts: 572 Forumite
    First Anniversary Combo Breaker
    We were just totally thrown by such a letter arriving out of nowhere.
    Baby daughter born Jan 10
    Baby son born June 11
  • xylophone
    xylophone Posts: 44,336 Forumite
    Name Dropper First Anniversary First Post
    https://www.gov.uk/child-benefit-tax-calculator

    He might wish to increase his pension contributions?

    https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/reduce-high-income-child-benefit-charge/
  • daveyjp
    daveyjp Posts: 12,505 Forumite
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    He needs to do a tax return.

    Depending on salary he can either choose to give it up, or continue receiving it knowing he will have to make a repayment every year.
  • p00hsticks
    p00hsticks Posts: 12,779 Forumite
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    daveyjp wrote: »
    He needs to do a tax return.

    Depending on salary he can either choose to give it up, or continue receiving it knowing he will have to make a repayment every year.


    Is there a third option - to not receive any money but for the OP still to get the associated NI credits to go towards their state pension entitlement ?
  • YBR
    YBR Posts: 546 Forumite
    First Post First Anniversary Mortgage-free Glee! Name Dropper
    Yes, pOOhsticks. That is possible.
  • WEZZY2
    WEZZY2 Posts: 38 Forumite
    What time of the year do you declare this and when to you pay it?
  • yorkiechick
    yorkiechick Posts: 115 Forumite
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    WEZZY2 wrote: »
    What time of the year do you declare this and when to you pay it?

    It is declared through self-assessment on a tax return. The amount owing would need to be paid by the corresponding 31st January, if it cannot be collected through PAYE in an adjustment to your tax code.
  • mhendel86
    mhendel86 Posts: 13 Forumite
    First Post Combo Breaker First Anniversary
    Hi brednall, I've had exactly the same letter this week and am in the same situation as you. The letter is badly written and very confusing - stating 'penalties' and 'charges' and 'must do this now' language is used.

    I have tried calling them, but long wait after getting through loads of options - difficult to do at work and they close at 5pm - I've e-mailed them and got an auto response saying we'll get back to you in 21 days - useful. Especially when the letter says you 'must do this now'.

    I've had a go at the online calculator and it reckons I owe HMRC the exact amount that I've been paid in child benefit over the last few years - so what's the point in receiving it in the first place! Probably just going to cancel it now - not worth the hassle!

    I am hoping they e-mail back and I can slowly re-pay through tax code adjustment if I have to.
  • yorkiechick
    yorkiechick Posts: 115 Forumite
    First Post Name Dropper First Anniversary
    mhendel86 wrote: »
    Hi brednall, I've had exactly the same letter this week and am in the same situation as you. The letter is badly written and very confusing - stating 'penalties' and 'charges' and 'must do this now' language is used.

    I have tried calling them, but long wait after getting through loads of options - difficult to do at work and they close at 5pm - I've e-mailed them and got an auto response saying we'll get back to you in 21 days - useful. Especially when the letter says you 'must do this now'.

    I've had a go at the online calculator and it reckons I owe HMRC the exact amount that I've been paid in child benefit over the last few years - so what's the point in receiving it in the first place! Probably just going to cancel it now - not worth the hassle!

    I am hoping they e-mail back and I can slowly re-pay through tax code adjustment if I have to.

    Unfortunately the tax office puts the onus on you to keep them updated, but this is on their assumption that everyone knows all the rules!
    If your salary is over £60K for any tax year since 7th January 2013, when the charge was implemented, the full amount of child benefit received will need to be repaid.
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