High income child benefit charge...oh ****

Participant

Participant

Participant

Caporegime
Joined
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Warwickshire
Just got a letter from HMRC asking me if I should have been paying self-assessment income tax on child benefits my wife and I have been receiving for the past...while.

Has anyone else received one of these recently? I know there are those that will perhaps fairly say I should have known about it and I'm sure I'll get blasted for this thread, but I wasn't aware of the charge and assumed all of this type of thing would flow through PAYE anyway.

I'm now slightly concerned that I'll have £xk to pay to the tax man in child benefit receipts that I wasn't entitled to, plus potential penalties and interest.

I believe I can gift my wife's pension fund a certain amount to reduce my gross taxable pay and that this can be done for prior years too.

Does anyone have any experience of this scenario?

Thanks.
 
Crappy answer I know, but to be fair, you really should have been aware that child benefit is means tested and not available to a lot of people. I pay the charge through my tax return (not sure why I claim it in the first place as it obviously all goes straight back).

Sad times, my parents gen received it without means testing :(
 
I think you either opt out or pay it back through tax code. My accountant says take it and pay it back, circumstances change you may not ever remember to opt back in.
 
Yeah it's a ******* ballache.
Works out to be you paying back 10% for each £1000 over £50,000, up to £60,000 when you pay it all back.

I don't understand why it's all done through self assessment rather than just a reduced allowance.

There's something about it being worthwhile to still receive due to state pension but I don't understand this. Since I now have to pay it all back each year I may choose not to receive it.
 
Deaths_Calling said:
There's something about it being worthwhile to still receive due to state pension but I don't understand this. Since I now have to pay it all back each year I may choose not to receive it.
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Yes non working parents it's the link they need to have non continuous NI payments. Could leave lots with no or reduced pension.
 
We got charged £700 the first year we were eligible for it. "Unfortunately there was a delay in our systems so you were overpaid"...like you just can't win.
 
I too had no idea this was a thing, thanks for the heads up @Participant, not much use to yourself I'm sure but it's only been 2 years that I'm going to need to pay back!

Oops.
 
Yep I’ve had it aswell. Last years my bonus has taken me over the limit so I’ve got to pay a chunk back.
 
It's okay to opt out if your the tax payer but the link between stay at home mums not paying NI and gaps in NI payments resulting in them not being eligible for a full pension later on needs to be considered.

Just opting out is complicated probably as complicated as staying in :p
 
Jez said:
Well, you are not eligible for it based on income level. That is a form of means testing no...

Are you just being smart and will now explain that there is a very strict definition for means testing? :p
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Dude, you can get child benefit no matter your income, come on, sort your replies out.
 
Threepwood said:
Dude, you can get child benefit no matter your income, come on, sort your replies out.
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Just being smart then? :p There is always guaranteed to be at least one on an open forum so no hard feelings.

Having to pay it all back is as good as it not being paid at all, there is a technical reason which is alluded to above as to why it is better claimed and then repaid, which is what I do, but I’d imagine that most people simply don’t bother. I’m not quite sure why I claim it at all other than following the advice, which at the time I’d be given too.
 
Jez said:
Just being smart then? :p

Having to pay it all back is as good as it not being paid at all, there is a technical reason which is alluded to above as to why it is better claimed and then repaid, which is what I do, but I’d imagine that most people simply don’t bother. I’m not quite sure why I claim it at all other than following the advice, which at the time I’d be given too.
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It does not change the fact that child benefit is non means tested... why say it is when it isnt? Why not say, child benefit is non means tested, but after a certian income you are liable for child benefit tax?
 
Threepwood said:
It does not change the fact that child benefit is non means tested... why say it is when it isnt? Why not say, child benefit is non means tested, but after a certian income you are liable for child benefit tax?
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Sounds like you just defined means testing...

The sky is not blue but it does sit in the vicinity of 430–770 Thz band range.
 
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