Child benefit - high rate taxpayer
lorhen1966
Posts: 19 Forumite
Hi there, I'm wondering if anyone else has had a similar shock as we have. My husband received a letter from HMRC saying that he has to repay virtually all of the child benefit that I have received in the years 13/14 and 15. I remember hearing something about High Rate tax payers years ago but didn't take any notice because Ive always claimed the child benefit and I was out of work at the time (and still am) so wasn't paying any tax. My husband doesn't get pay slips and never checks them online so neither of us have any idea what he gets except for his basic which wasn't any where near the higher rate either. But over those years he has gradually slipped into the HRT bracket because of overtime and travelling time. We have filled in all the forms and have given our reasons for why we had not realised this was a mistake on our part. Ive always thought that if you weren't entitled to something they would let you know more or less straight away - we stopped getting child tax credits because they told us we weren't eligible. Its a huge shock and because I'm not working we have had to tighten up so to find we have to pay £2000 within the next couple of weeks is causing a lot of stress because we don't have it readily available. They've added interest on and a penalty charge which is making it even worse. I get that we have to pay it back and they have accepted that we didn't deliberately set out to commit any kind of fraud so I don't think its right that we should be penalised.
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There have been many posts about this.
It was well publicised at the time and there is plenty of information online about the child benefit high income charge.
Ignorance of the law is not considered a reasonable excuse. Neither is HMRC not reminding you. It is up to the taxpayer to ensure their tax affairs are in order
Why doesn't he receive payslips? Does he receive a P60 each year?
If he needs to repay all the child benefit his taxable income must have exceeded £60,000 so well into the higher rate band.
Have they actually charged a deliberate penalty? If so that's unusual if they haven't discussed it with you.0 -
If you are satisfied that you owe the money (not sure what you mean by your OH being paid for travelling time - do you mean travel expenses or salary?) then you can ask for time to repay.
https://www.gov.uk/repay-child-benefit-overpayments
Since you are a higher tax payer then they will expect you to be able to pay over a relatively short time period so have a look at your income and expenditure and cut back as much as you can to make the payments.0 -
Darksparkle wrote: »There have been many posts about this.
It was well publicised at the time and there is plenty of information online about the child benefit high income charge.
Ignorance of the law is not considered a reasonable excuse. Neither is HMRC not reminding you. It is up to the taxpayer to ensure their tax affairs are in order
Why doesn't he receive payslips? Does he receive a P60 each year?
If he needs to repay all the child benefit his taxable income must have exceeded £60,000 so well into the higher rate band.
Have they actually charged a deliberate penalty? If so that's unusual if they haven't discussed it with you.
As I said I vaguely remember something about it but I don't read newspapers and don't watch TV so didn't take much notice as I thought it applied to me being the one who was claiming it and as I was not working didn't think it affected me. I was seriously depressed at that time having lost my job of 30 years and was going through a very bad period in my life
Everything is electronic and he doesn't print them off or bother looking at them.
the first 2 years there is only a small amount to pay back as he was only £1000 and £1500 over the £50000 but the third year it went up quite a bit which I presume is because he did a lot of travelling that year.
I'm not sure what you mean by deliberate penalty, they accepted that we didn't deliberately try not to pay0 -
lorhen1966 wrote: »As I said I vaguely remember something about it but I don't read newspapers and don't watch TV so didn't take much notice as I thought it applied to me being the one who was claiming it and as I was not working didn't think it affected me. I was seriously depressed at that time having lost my job of 30 years and was going through a very bad period in my life
Everything is electronic and he doesn't print them off or bother looking at them.
the first 2 years there is only a small amount to pay back as he was only £1000 and £1500 over the £50000 but the third year it went up quite a bit which I presume is because he did a lot of travelling that year.
I'm not sure what you mean by deliberate penalty, they accepted that we didn't deliberately try not to pay
Sorry I misread the last part of of your OP. A penalty would be charged unless you had a reasonable excuse. The penalty is a percentage of the tax and that percentage increases depending on the severity. I'd imagine they've probably charged around 15%?
In this case it doesn't sound like your husband had a reasonable excuse as being unaware of the change isn't accepted as a reasonable excuse neither is not looking at payslips however if you don't agree then appeal the penalty decision. The interest cannot be appealed.0 -
https://revenuebenefits.org.uk/child-benefit/guidance/how-do-child-benefit-and-guardians-allowance-work/high-income-child-benefit-charge/
In future he may wish to consider increasing his pension contributions?
See
https://www.theguardian.com/money/2013/sep/28/child-benefit-pension-contributions-higher-earners0 -
Hi there,
Just caught out with this myself. Nice big Tax bill.
It hardly seems fair that 2 parents both working and paid below the £50,000 threshold. Wont have to pay this whereas a single earner earning more than £50,000 has to.
Surely this should take in to account both parents if living together?
Sorry more of a rant than anything helpful. Off to go an pay the lovely HMRC now.0 -
Hi there,
Just caught out with this myself. Nice big Tax bill.
It hardly seems fair that 2 parents both working and paid below the £50,000 threshold. Wont have to pay this whereas a single earner earning more than £50,000 has to.
Surely this should take in to account both parents if living together?
Sorry more of a rant than anything helpful. Off to go an pay the lovely HMRC now.
It should but for some stupid reason it doesn't.0 -
It hardly seems fair that 2 parents both working and paid below the £50,000 threshold. Wont have to pay this whereas a single earner earning more than £50,000 has to.
I was not affected by the legislation but wrote to my MP about the matter- he peddled the illogical party line (see below).
https://revenuebenefits.org.uk/child-benefit/guidance/how-do-child-benefit-and-guardians-allowance-work/high-income-child-benefit-charge/#Single%20earner%20dual%20earner%20unfairness%20remains
Single earner/dual earner unfairness remains
The proposal does not address the single earner/dual earner problem – for example, families with a single earner on £60,000 a year will have the full amount of child benefit clawed back, while couples where both partners earn just under £50,000 will retain their child benefit in full.
The only way to address this problem would be to introduce some form of household means test. However, the Government has said repeatedly that it has no intention of doing so.
A household means test applies to other benefits so the above seems nonsensical.
That said, the change was so widely publicised I can't imagine how anybody missed it.0 -
The cost of means testing it would cost many more times than the amount raised by the charge. Make of that what you will."You've been reading SOS when it's just your clock reading 5:05 "0
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