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

Caporegime
Joined
13 May 2003
Posts
33,939
Location
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.
 

Jez

Jez

Caporegime
Joined
18 Oct 2002
Posts
33,073
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 :(
 
Associate
Joined
5 Apr 2004
Posts
1,191
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.
 
Associate
Joined
23 Feb 2019
Posts
461
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.
 

Jez

Jez

Caporegime
Joined
18 Oct 2002
Posts
33,073
No, it is not means tested...
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
 
Tea Drinker
Don
Joined
13 Apr 2010
Posts
18,416
Location
Sunny Sussex
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

Jez

Caporegime
Joined
18 Oct 2002
Posts
33,073
Dude, you can get child benefit no matter your income, come on, sort your replies out.

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.
 
Soldato
Joined
29 Sep 2011
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5,498
Location
Monkey Island
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.

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?
 
Soldato
Joined
1 Sep 2007
Posts
5,313
Location
Santa Monica, California
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?

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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