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

Threepwood said:
What is? Child benefit, or child benefit tax?
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What do you mean which? They’re coupled together - one can‘t apply if you don’t claim the other... that’s how the means testing is implemented as per the explanation already given including the quotes from the politicians that created it (this method of means testing it) in the first place!
 
Jez said:
March is the last full month of the year is all i meant, by march your example would be nearly fully paid. :p
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LOL! :D
Yes indeed, good point. You are correct!
Well in that case, fired in June, so three months work with an extra month to follow as termination pay (or whatever it's properly called). :)
 
Pudney said:
I think it can be taken either way, but worryingly @Syla5 has followed up with a post that appears to reinforce my belief he is expecting interest will only be charged from the date of the phone call.
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Based on the information I was provided on the phone, checked and double checked, the amount advised, then it is an interest charge based on the day of the phone call. There is a late charge that is present also, which I believe is what you are referring to, which likely includes interest rolled in to it. That I am not questioning in any way.
 
Threepwood said:
Which is assesed based on your means? Child benefit, or child benefit tax?
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One is coupled with the other. See previous posts. The tax is the method by which the child benefit (if claimed) is means tested. They used the income tax system as a way of means testing child benefit as it was considered simple to implement relative to conventional means testing which involves assessing eligibility up front.
 
dowie said:
One is coupled with the other. See previous posts. The tax is the method by which the child benefit (if claimed) is means tested. They used the income tax system as a way of means testing child benefit as it was simple to implement.
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So which is assesed by your means, Child benefit, or child benefit tax? It's not both, and there is only one correct answer.
 
Threepwood said:
So which is assesed by your means, Child benefit, or child benefit tax? It's not both, and there is only one correct answer.
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Child benefit by the application of the tax. They’re coupled together - the tax only applies if you’re claiming it and deemed ineligible to get it or to get the full amount. I.e. between 50 and 60k

This is deemed to be a simpler way to administer it at the moment (as already mentioned) and allows for people whose income varies.
 
dowie said:
Child benefit by the application of the tax. They’re coupled together - the tax only applies if you’re claiming it and deemed ineligible to get it or to get the full amount. I.e. between 50 and 60k
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Nice try, but not correct. If child benefit was means tested it would mean you were not eligible to claim for it if you had over a certain amount of money.... yet, you can be earning any amount of money and be eligible... because it is not means tested.

Just because they give with one hand and take away with another, that does not change this.
 
I got my letter last week, was completely unaware of this charge.

I applied for the benefit in 2015 when our son was born and I was earning 50k. 2016/17 onwards I've been earning over 50k and over 60k for the past 3 years. Planned to call them this week, better lube up.
 
Threepwood said:
Nice try, but not correct. If child benefit was means tested it would mean you were not eligible to claim for it if you had over a certain amount of money.... yet, you can be earning any amount of money and be eligible... because it is not means tested.

Just because they give with one hand and take away with another, that does not change this.
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Well fundamentally it does because one nets off the other - that's how the means test has been designed and implemented - as per the IFS quote when it was first brought in:

""The government might argue that using the income tax system to means test child benefit is cheaper for it to administer than devising a brand-new means-test, and can be done more quickly."

Just because it isn't means tested in the same way as other benefits doesn't mean it isn't means tested - this is simply by design, I did take the time to even highlight this by going back to quotes from Osborne and IDS who implemented this in the first place.

The intent was to remove it as a universal benefit and means test it, they've implemented this means test retrospectively via the income tax system rather than via some up front test as it was seen as simpler to implement and administer that is all.

The net effect is still that this benefit is no longer a universal benefit, it is no longer a benefit for individual high earners with an income above 60k and it tapers off above 50k. That it can still get paid out then deducted back is simply how this form of means testing/removal of the universal nature of the benefit has been implemented that's all.

I think it is both pointless and silly to pretend otherwise.
 
dowie said:
Well fundamentally it does because one nets off the other - that's how the means test has been designed and implemented - as per the IFS quote when it was first brought in:

""The government might argue that using the income tax system to means test child benefit is cheaper for it to administer than devising a brand-new means-test, and can be done more quickly."

Just because it isn't means tested in the same way as other benefits doesn't mean it isn't means tested - this is simply by design, I did take the time to even highlight this by going back to quotes from Osborne and IDS who implemented this in the first place.

The intent was to remove it as a universal benefit and means test it, they've implemented this means test retrospectively via the income tax system rather than via some up front test as it was seen as simpler to implement and administer that is all.

The net effect is still that this benefit is no longer a universal benefit, it is no longer a benefit for individual high earners with an income above 60k and it tapers off above 50k. That it can still get paid out then deducted back is simply how this form of means testing/removal of the universal nature of the benefit has been implemented that's all.

I think it is both pointless and silly to pretend otherwise.
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Yes. I do understand. Do you understand that you recieve CB with no means test?
 
Threepwood said:
Yes. I do understand. Do you understand that you recieve CB with no means test?
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I'm not sure what your issue is then. I'm aware of how the means testing works in this case thanks, I've made several posts already regarding it.

You're now just being what @Jez would describe as "that guy"
 
Guys can you both agree to disagree! We're going round in circles and it's clear you're not going to convince the other!

For the record i agree with @dowie, the benefit might be paid out without specific means testing, but ultimately it IS means tested by way of the tax.
 
Syla5 said:
Based on the information I was provided on the phone, checked and double checked, the amount advised, then it is an interest charge based on the day of the phone call. There is a late charge that is present also, which I believe is what you are referring to, which likely includes interest rolled in to it. That I am not questioning in any way.
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Just to clarify, the potential penalties and interest are:
  • A penalty for failure to notify (hopefully this won't be charged),
  • A penalty/penalties for late payment, (30 days late = 5% of tax owed, 6 months late = another 5%, 12 months late = another 5%)
  • Interest charged from the date it was due to be paid until the date you actually pay the tax.
Until you receive any written information from HMRC take anything told on the phone with a pinch of salt as they may be paraphrasing. What I've said above is just to give you pre-warning.

Note - there's also penalties for filing a tax return late, however, if you haven't had a notice to file yet then there shouldn't be any penalties.
 
LiE said:
I got my letter last week, was completely unaware of this charge.

I applied for the benefit in 2015 when our son was born and I was earning 50k. 2016/17 onwards I've been earning over 50k and over 60k for the past 3 years. Planned to call them this week, better lube up.
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Good luck. One guy at our work never notified them or filled out tax returns when his wage increased from 45k to 75k about 5 years ago. He got a demand the other day for £5k in back tax.
 
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