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  • FIRST POST
    • Nearlydebtfree
    • By Nearlydebtfree 9th Oct 19, 6:34 PM
    • 16Posts
    • 15Thanks
    Nearlydebtfree
    High Income Child Benefit Charge
    • #1
    • 9th Oct 19, 6:34 PM
    High Income Child Benefit Charge 9th Oct 19 at 6:34 PM
    Hi

    I have just come back from work to a letter from HMRC re the HICBC and I have now worked out that I owe them money. Totally put my hands up, I didn't know about the charge, and I don't remember hearing about it, but I am not going to argue this with them as it is entirely my own fault - ignorance is no defence. Payment was changed to my account on my divorce and I just simply had a letter confirming what I would receive. I have obviously missed the news about it!

    Anyway - I have today registered for self-assessment online and I assume I wait for a code from them or something and then fill in a tax return for the last 3 years which is when I went over the limit. I have also stated that I do not want to receive it anymore and filled a form in for that tonight.

    My question is - do I have to repay the sum immediately? They have only asked me to fill in details up to 2017-18 so far and not 2018-19. I can pay it but I would need a little time and I just wondered on their time frame or if it just a case of cough up now? Am I also likely to be hit with a penalty as I have looked at my tax returns and I earnt £1k over the limit in 2015-2016 but that was the first time I went over from 2013.I was hoping by responding to them straightaway to deal with it they may be kinder but am I just being ridiculous!

    I am not complaining, I am taking the full responsibility and just want to sort it without too much trauma.

    Other than that a joyous letter to come home too
Page 2
    • spaceman2009
    • By spaceman2009 12th Nov 19, 7:59 PM
    • 10 Posts
    • 2 Thanks
    spaceman2009
    Thanks thatís really helpful info. A little less pressure it all helps 👍
    • Nearlydebtfree
    • By Nearlydebtfree 12th Nov 19, 9:07 PM
    • 16 Posts
    • 15 Thanks
    Nearlydebtfree
    Nearlydebtfree

    If you file your 2018:19 Self Assessment return by 30 December 2019 and owe less than £3,000 for that tax year and are still employed in a good paying job then you shouldn't need to pay the amount due for 2018:19 now.

    You can have whatever is owed for 2018:19 included in your 2020:21 tax code, effectively a 14 month long interest free loan.
    Originally posted by Dazed and confused
    Thanks for this! Does this mean it would be taken from April 2021 from my salary if I didn't manage to pay it any sooner? Would this apply to the amount I owed for the years 2015, 2016 and 2017? They have agreed I don't have to pay a penalty so I just owe interest on the amount up to 31/10.

    Thanks again!
    • Dazed and confused
    • By Dazed and confused 12th Nov 19, 9:26 PM
    • 5,634 Posts
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    Dazed and confused
    Does this mean it would be taken from April 2021 from my salary if I didn't manage to pay it any sooner?
    No. This only applies to money owed for 2018:19 and is dependent on you filing your Self Assessment return by 30 December 2019.

    If you do that and owe less than £3,000 and are still earning decent money you can have the money owed for 2018:19 tax code included in your 2020:21 tax code instead of paying it on 31 January 2020.

    Your tax code for 2020:21 will be reduced to collect what is owed and you will pay a bit more tax each month from 6 April 2020 through to 5 April 2021.

    If you don't do this at that time you cannot opt for it at a later date.

    Would this apply to the amount I owed for the years 2015, 2016 and 2017?
    No, you will have to pay that direct to HMRC.

    They have agreed I don't have to pay a penalty so I just owe interest on the amount up to 31/10.
    That is unusual, you usually have to pay interest until you actually pay the amount owed.
    • binkydoormat
    • By binkydoormat 12th Nov 19, 10:00 PM
    • 6 Posts
    • 1 Thanks
    binkydoormat
    When I spoke to HMRC a few weeks ago the guy advised me to appeal any penalty and also to appeal any interest on previous years given HMRC have failed to tell me about the existence of the charge. I'm not sure how much I can rely on his advice though given I've now received a letter addressed to my mum instead of me (although with Mr rather than Mrs!).
    • calcotti
    • By calcotti 12th Nov 19, 10:32 PM
    • 4,108 Posts
    • 2,774 Thanks
    calcotti
    You may find this recent House of Commons paper interesting https://researchbriefings.files.parliament.uk/documents/CBP-8631/CBP-8631.pdf
    It looks at the charge, the criticisms of it and the criticisms of how HMRC introduced it and have treated people affected since.
    • Jnr16
    • By Jnr16 13th Nov 19, 10:16 AM
    • 1 Posts
    • 0 Thanks
    Jnr16
    I received that same letter last week so thought I'd better check everything out as I'd never heard of the HICBC before (I certainly don't remember getting any correspondence on it).


    Anyway I filled out the calculator and phoned them and I was told I owe £3400 including a penalty of £200+ for three years up to 2017/18.


    I will owe £1076 for 2018/19 once I fill in the self assessment and will probably owe another £650 for 2019/20 when it comes.


    I actually feel sick.
    • Mrsemmapage
    • By Mrsemmapage 14th Nov 19, 7:52 PM
    • 22 Posts
    • 2 Thanks
    Mrsemmapage
    I can believe this is happening to me and my husband. We have never heard of this charge and my husband from 2016 earnt over 50k by like £1k - now he earns a third of that and we need to find all this money - I literally feel like am going to have a nervous breakdown, I can understand this at all!!!
    • Dazed and confused
    • By Dazed and confused 14th Nov 19, 9:07 PM
    • 5,634 Posts
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    Dazed and confused
    If his (adjusted net) income was only £51k for a tax year then he would only need to repay 10% of the Child Benefit received for that tax year.
    • StephenP66
    • By StephenP66 16th Nov 19, 4:33 PM
    • 1 Posts
    • 0 Thanks
    StephenP66
    I have also received this letter. I have never heard of this tax before either.
    I thought this letter was a dodgy one as my first name has been spelt incorrectly. Steven instead of Stephen.
    How can they get this wrong? I have been on the hmrc website and my name is spelled correctly.
    I went over the £50000 because I sold some company shares to pay off some debt otherwise I would have been under the threshold. Can I take this amount off the calculation?
    This is my typical kind of luck. Last week I got a tax refund as I had apparently paid too much tax. The company I work for sort my tax (PAYE) so I don't know how this can happen. Then this week they want twice as much back.
    Last edited by StephenP66; 16-11-2019 at 4:58 PM. Reason: missing info
    • Dazed and confused
    • By Dazed and confused 17th Nov 19, 1:43 AM
    • 5,634 Posts
    • 2,992 Thanks
    Dazed and confused
    I went over the £50000 because I sold some company shares to pay off some debt otherwise I would have been under the threshold. Can I take this amount off the calculation?
    If it's part of your adjusted net income (which determines the High Income Child Benefit Charge) then no, why would you think you could deduct it??

    Sale of shares is commonly a Capital Gain, not taxable income. Bit this may be different depending on the exact nature of what happened with the company.

    The company I work for sort my tax (PAYE) so I don't know how this can happen.
    Don't know why you think that, it's not true. Your employer is responsible for deducting tax based on the tax code provided to them by HMRC. It is your responsibility to check that the tax code HMRC have calculated is correct.
    • spaceman2009
    • By spaceman2009 17th Nov 19, 8:54 AM
    • 10 Posts
    • 2 Thanks
    spaceman2009
    I would suggest itís HMRCís responsibility to determine the correct tax code, especially for those whose employers do their tax for them. The same for the High Income Child Benefit Charge, we cannot know about this unless HMRC inform you of it at some point. The average Joe cannot know all tax rules and information, it needs to be provided. 😡
    • calcotti
    • By calcotti 17th Nov 19, 9:19 AM
    • 4,108 Posts
    • 2,774 Thanks
    calcotti
    I would suggest itís HMRCís responsibility to determine the correct tax code, especially for those whose employers do their tax for them.
    Originally posted by spaceman2009
    An employer deducts income tax based on the PAYE code provided by HMRC, they (the employer) do not not sort out an employee's tax affairs. HMRC, in turn, can only base a tax code on information available to them, If somebody has additional income out of the ordinary HMRC cannot anticipate this in advance so the Tax Code will not have taken this into account and additional tax may be due.

    However, as far as I can see https://www.gov.uk/guidance/adjusted-net-income, it appears that while dividends from shares count towards net adjusted income the proceeds of the sale of shares would not - as has been pointed out by dazed and ... the proceeds of a sale of shares is a capital gain rather than income.
    Last edited by calcotti; 17-11-2019 at 9:22 AM.
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