Sounds like I have received more poor communication from HMRC. Not surprising.
High income child benefit charge...oh ****
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Sounds like I have received more poor communication from HMRC. Not surprising.
Ignorance of the law generally isn't a defence. If you challenge the penalty to a Tribunal you're basically playing lucky dip as to whether you get the few judges who are prepared to accept that as a reasonable excuse (can't remember if the issue has gone to a higher court yet, it may have done). Also, HMRC are a tax collection and management section of the government, it's not actually their responsibility to keep people up to date with tax rules.
They may well do as they communicated, although in the tax world I find it better to be aware of the different outcomes just in case you get a letter that doesn't tie in to what you were led to believe.
For anyone getting these charges be aware as well that it is possible to arrange payment plans with HMRC, if you want to do a payment plan do so promptly (i.e. before you are meant to make any payment) and stick to anything you agree.
Caporegime
Yep I get that, but the fact this letter has been sent out to a lot of people tells me there was an issue with this being communicated, otherwise we would all be aware and no letter would be needed. I wouldn't fight them on a penalty, I'm just hoping they see some sense when it comes to "reasonable excuse" part of the letter.
The point I'm making is that there isn't really any issue with communication (at least between yourself and HMRC) because HMRC aren't responsible for communication. There's probably issues with internal HMRC/DWP data reconciliations (bane of my life is the lack of government data sharing) leading to a gap in communication to you about it, but ultimately it isn't actually HMRC's responsibility to tell you that you're taxable, it's your responsibility to tell HMRC.
The reason I'm labouring the point is that it ties in to reasonable excuse, i.e. what is your reasonable excuse for not telling HMRC about your liability to the charge.
In my experience of this, HMRC have been fairly reasonable about this if, on responding to this letter you call them up and explain you were not aware of the charge and tell them you need to do tax returns and for which years. They will then issue to notices to file (3 months to do so) and then you fill them in, file them, and pay the tax. They normally waive the penalties and interest.
Permabanned
I received child benefit when the kids were 14-15 bad 2 yrs .. 9 yrs later I had a letter stating they wanted it all back ..
tried to fight it ..got stuck with a bill for 2.5k
hmrc at it's best
tried to fight it ..got stuck with a bill for 2.5k
hmrc at it's best
Caporegime
Spoken to HMRC and they were understanding and there will be no penalties. They did say that my reason wasn't reasonable enough for them to waiver the penalty. However since the earlier years the charge is 0% and 17/18 they can still issue a return, there would be no penalty. Part of this is due to "coming forward" which is used as evidence that you aren't trying to skirt away from paying.
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Eh? so this was pre-2013?
Did you and your partner both claim it after having split up or something? It was only means tested as of 6 years ago AFAIK.
This cant be the same thing....
Soldato
Does this mean you're all benefit cheats...
Soldato
I had the same convo with them this morning. they can work out payment plans, so hopefully it wont be too bad to pay it back. For 18/19 i have to fill out a self Assesment before the end of Jan 2020, thats the one thats going to hurt as we had child no 3 by then lol. I will keep claiming, but i'll just put the money in a seperate account.
The child benefit scam.
I still claim it even though I have to pay all of it back. I believe that claiming it is the only way for your children to be issued with an NI number at 16. If you don't claim, you have more hoops to jump through at that point.
The problem with being forced to take something I don't want is that it gives the HMRC a big chance to mess up every year... and that they have done consistently. It's a complete lottery as to what tax code I'll be issued with after doing the self assessment. Speaking to HMRC is also a lottery - you never get the same response twice.
I still claim it even though I have to pay all of it back. I believe that claiming it is the only way for your children to be issued with an NI number at 16. If you don't claim, you have more hoops to jump through at that point.
The problem with being forced to take something I don't want is that it gives the HMRC a big chance to mess up every year... and that they have done consistently. It's a complete lottery as to what tax code I'll be issued with after doing the self assessment. Speaking to HMRC is also a lottery - you never get the same response twice.
I've received a letter too and called them up. They went through a set of questions to decide whether they were going to fine me and luckily the answers I gave (which were all honest) mean I have no penalty charge. I do have to pay back the last 4 years worth though
. Luckily we never spent it and just put it to one side so no major issue.As someone earlier has said, I'll continue to claim it and pay it back through a tax return. Circumstances can change so I'd rather not have to re-apply if my salary suddenly dropped. There's also the (small) benefit of earning some interest on it throughout the year before paying it back again at the end of the tax year.
It is more than a little frustrating that two people can earn £49k pa and still receive the full amount but one salary of £60k with the other being zero would receive nothing.
I've received a letter too and called them up. They went through a set of questions to decide whether they were going to fine me and luckily the answers I gave (which were all honest) mean I have no penalty charge. I do have to pay back the last 4 years worth though
As someone earlier has said, I'll continue to claim it and pay it back through a tax return. Circumstances can change so I'd rather not have to re-apply if my salary suddenly dropped. There's also the (small) benefit of earning some interest on it throughout the year before paying it back again at the end of the tax year.
It is more than a little frustrating that two people can earn £49k pa and still receive the full amount but one salary of £60k with the other being zero would receive nothing.
Yep, super annoying. You can earn more than £60k and not pay it all back. If you have salary sacrifice, and contribute a big chunk to your pension, and buy extra holiday (again, sacrificing pay), and/or have childcare vouchers you can get your 'taxable pay' down to below £60k and keep some of the child benefit. For a couple of years I avoided paying any back by wacking money into my pension but circumstances changed and now i have to file tax returns and pay back most of it.
The other reason to claim it, and this is important, is that if one of the parents is not working, they should claim it as it counts towards NI contributions and your NI record for state pension. My wife claims it, I pay most of it back. She feels its her money to spend on uniforms, bits for the kids etc, I just keep quiet.
Edit: holiday not holding
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Associate
Anyone earning over £50k, why are you taking higher rate income instead of banging it all in pension?
Tactically it’s better to remain in the basic rate band especially if claiming child benefit. You’ll only see 48p out of every pound anyway (40% + 12%) NI. Much better to see the whole £1 in pension.
Tactically it’s better to remain in the basic rate band especially if claiming child benefit. You’ll only see 48p out of every pound anyway (40% + 12%) NI. Much better to see the whole £1 in pension.
Caporegime
It needs to be a balance. If you earn £70k, no use “banging” 20k in a pension each year only to find you have to make a few cut backs. £50k doesn’t go that far these days and it also depends if you’re the sole earner in a family.
You are absolutely right, everybody in a position to do so should always contribute to their ceiling. Remember though, that this is limited to £40k/annum/~£1m lifetime and therefore is not a solution for everyone.
As you asked a direct question wondering why people wouldnt do this, personally i have no way to strip back my income as far as £50k/annum, so i am left at higher marginal rates unfortunately, along with the loss of CHB.
Depends how much more than 50k you earn and where you live etc.... It could make sense for a bit if you’re not earning a huge amount over it and 50k is enough to live on etc...
That’s probably more applicable up north and/or in some situation where your mortgage payments are low etc...
Soldato
Thanks for the heads up, recently got a promotion at work & have a little one aged 2 so will need to sort this out - thankfully promotion came late this year so shouldn't be hit too hard.
I cancelled mine after a year as it worked out i would pay the lot back. All the years of rubbish pay i then grab a decent paid job 6 months after my daughter was born so get nothing 
I had a mate who was doing the self assessment for years and he kept getting told he didn't need to do it. He stopped and subsequently got fined and sent a bill for several thousand pounds.
I had a mate who was doing the self assessment for years and he kept getting told he didn't need to do it. He stopped and subsequently got fined and sent a bill for several thousand pounds.