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  • FIRST POST
    • keepthelinguini
    • By keepthelinguini 9th Aug 17, 2:42 PM
    • 5Posts
    • 3Thanks
    keepthelinguini
    High Income Child Benefit Charge
    • #1
    • 9th Aug 17, 2:42 PM
    High Income Child Benefit Charge 9th Aug 17 at 2:42 PM
    I'm so annoyed. I've just received a big bill from HMRC and been told I'm going to pay a penalty, and I think it's completely unjust.

    I'm a PAYE employee.

    In 2013 when the High Income Child Benefit Charge was introduced I earned under the £50,000 threshold - so the change in rules didn't apply to me.

    Since then my income has gone slightly over £50,000.

    I've just received a bill for well over £1k for missed HICBC in the two years ending 2015 and 2016. I called them to query, and they said I should have registered for self assessment when my income went over £50k, and that I'll be charged a penalty on top of the amount I owe - around £250 - for failing to notify them.

    HOW was I supposed to know I need to start filling out a tax return when my income went above £50k?

    I'm planning to appeal the penalty, but the lady in the call centre told me that it would fail because you can't claim ignorance of the rules.

    IT'S SO UNJUST!

    If anyone has any advice, I'd be very pleased to hear it.
Page 10
    • user1168934
    • By user1168934 30th Oct 18, 10:45 AM
    • 292 Posts
    • 120 Thanks
    user1168934
    Yes. It's taxable income so needs to be included.
    .
    Originally posted by Dazed and confused

    Thanks mate. The banks do seems to deduct some tax before paying the interest or it is a different interest. Does that not cover the tax liability?

    • Dazed and confused
    • By Dazed and confused 30th Oct 18, 10:51 AM
    • 3,220 Posts
    • 1,609 Thanks
    Dazed and confused
    Banks stopped deducting tax from interest about two and a half years ago.

    It may be that the interest itself is going to be taxed at a 0% tax rate (assuming it's no more than £500) but it is still part of your taxable income and "adjusted net income" which the High Income Child Benefit Charge is calculated on so it could increase the charge payable.
    • user1168934
    • By user1168934 30th Oct 18, 10:59 AM
    • 292 Posts
    • 120 Thanks
    user1168934
    Banks stopped deducting tax from interest about two and a half years ago.

    It may be that the interest itself is going to be taxed at a 0% tax rate (assuming it's no more than £500) but it is still part of your taxable income and "adjusted net income" which the High Income Child Benefit Charge is calculated on so it could increase the charge payable.
    Originally posted by Dazed and confused

    Thank you, you are probably correct. I might not have noticed whether the banks are deducting tax anymore or not. I will check.

    • user1168934
    • By user1168934 30th Oct 18, 11:26 AM
    • 292 Posts
    • 120 Thanks
    user1168934
    No one would advise you to commit fraud.
    Originally posted by Sibbers123

    Fraud was never my intent. It was merely whether I go and tell them or let them come back to me, clearly, I should go and register for self assessment and file a tax return.
    Thanks for your help.

    • Pallinson
    • By Pallinson 8th Nov 18, 8:27 PM
    • 1 Posts
    • 0 Thanks
    Pallinson
    Pension query
    Apologies for the repeated questions however what is listed in the calculator and the ANI section of the govt website seems to contradict.
    I have a standard pension which is deducted from my salary prior to tax (Left hand of payslip) so should I be deducting this amount from my income? The calculator states 'Do not include any contributions deducted before tax' in the allowable deductions section which would suggest not but in the ANI guidance and elsewhere it states that ANI is total taxable income less pension contributions (either gross or or relief at source)
    • Avied
    • By Avied 8th Nov 18, 8:34 PM
    • 3 Posts
    • 3 Thanks
    Avied
    Confusing or what
    I'm looking at my wifes P60 that shows she earns £53k but her pension contributions are £4500 per year, on the .gov calculator it says that she does not need to pay anything. Does she still need to fill out a self assessment form. Were both PAYE and have never needed to do self assessment. Our kids are 16 now so CB won't be with us forever, are we stuck with years of self assessment because of this. An utter shambles of a system, PAYE is there so I don't have to check my tex liability, my employer sends all my details to HMRC for me.
    Reasonably comfortable financially for the first time in my life, still have a mortgage, but getting there.
    • Dazed and confused
    • By Dazed and confused 8th Nov 18, 8:56 PM
    • 3,220 Posts
    • 1,609 Thanks
    Dazed and confused
    I have a standard pension which is deducted from my salary prior to tax (Left hand of payslip) so should I be deducting this amount from my income?
    No. It has already been deducted from your salary so your taxable pay, the amount that is shown in your P60, is lower.

    If you deducted it again you would be double counting it.

    Not sure you have read through the ANI guidance far enough.

    Step 1 states,
    Take off any tax reliefs that apply like:

    payments made gross to pension schemes - those that have been made without tax relief



    Step 3 - take off pension contributions
    If you made a contribution to a pension scheme where your pension provider has already given you tax relief at basic rate, take off the ‘grossed-up’ amount - what you paid plus the basic rate of tax.


    So, for every £1 of pension contribution you made, take £1.25 from your ‘net income’.

    Your contributions don't fall into either category.
    Last edited by Dazed and confused; 08-11-2018 at 9:02 PM.
    • Dazed and confused
    • By Dazed and confused 8th Nov 18, 9:09 PM
    • 3,220 Posts
    • 1,609 Thanks
    Dazed and confused
    I'm looking at my wifes P60 that shows she earns £53k but her pension contributions are £4500 per year
    Have you treated the pension contributions correctly?

    Does she actually have a salary of £57.5k which becomes taxable salary of £53k after pension contributions?

    Or is she paying into a personal pension?

    Does she still need to fill out a self assessment
    Depends on her adjusted net income. Which is still an unknown quantity.

    are we stuck with years of self assessment because of this
    If you or your wife have reason to file a return then yes. If not you won't need to.

    PAYE is there so I don't have to check my tex liability, my employer sends all my details to HMRC for me.
    PAYE doesn't remove the need to ensure your tax is correct. The ultimate responsibility lies with you although most of the time PAYE means the correct tax is deducted during the year.
    • qwertyqwerty
    • By qwertyqwerty 10th Nov 18, 12:09 AM
    • 101 Posts
    • 1 Thanks
    qwertyqwerty
    Hi I am going to be starting a new job in 2 weeks which will take my salary from 43k to well above the 60k higher rate limit. Question is if I ring HMRC now and cancel the Child Benefit am I still liable to fill out a self assessment for the tax year? If so is it more worthwhile to maintain the child benefit for the rest of the tax year, fill out the self assessment and cancel the CB from the next tax year?

    When I used the tax calculator it said I would need to pay back £645 for this tax year. 6 months of child benefit is £496.80, so not sure why I would need to pay back more than I have claimed for in this tax year, if I was to cancel it now
    • Dazed and confused
    • By Dazed and confused 10th Nov 18, 12:45 AM
    • 3,220 Posts
    • 1,609 Thanks
    Dazed and confused
    The higher rate limit is currently £46,350 (less for Scottish resident taxpayers).

    You might find it simpler to keep the Child Benefit for the full tax year.

    Any High Income Child Benefit Charge payable for 2018:19 isn't payable until 31:01:2020 so you could be earning some interest on the money received in the interim.

    And don't forget "salary" is irrelevant for High Income Child Benefit Charge purposes. Google "adjusted net income" for the accurate details.

    If you pay into a company pension your £43k salary could easily be just say £39k taxable income.

    Both tax and the High Income Child Benefit Charge are calculated on an annual basis so not sure why you think what Child Benefit you get in a six month period is relevant (unless of course it's because the child was born 6 months before the end of they'll tax year?).
    • xylophone
    • By xylophone 10th Nov 18, 10:50 AM
    • 27,368 Posts
    • 16,368 Thanks
    xylophone
    Hi I am going to be starting a new job in 2 weeks which will take my salary from 43k to well above the 60k higher rate limit.
    Make pension contributions in the current tax year?

    https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/reduce-high-income-child-benefit-charge/
    • Spidernick
    • By Spidernick 10th Nov 18, 11:45 PM
    • 2,972 Posts
    • 5,866 Thanks
    Spidernick
    Potentially some good news for some of you who have posted here about being charged penalties for not declaring Child Benefit:

    https://www.gov.uk/government/news/hmrc-to-review-high-income-child-benefit-charge-penalty-cases

    HMRC has announced that it is reviewing cases where a ‘Failure to Notify’ penalty was issued for the tax years 2013 to 2014, 2014 to 2015, and 2015 to 2016, to customers who did not register for the High Income Child Benefit Charge.
    The department will review cases for these years and issue penalty refunds if it finds the customer had a reasonable excuse for not meeting their tax obligation.
    But note:

    The review will not include anyone who received communications from HMRC about High Income Child Benefit Charge or claimed Child Benefit after the charge was introduced in 2012 to 2013.
    That should presumably read 'or started to claim Child Benefit after the charge was introduced in 2012 to 2013'.
    'I want to die peacefully in my sleep, like my father. Not screaming and terrified like his passengers.' (Bob Monkhouse).

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