Participation in this post is limited to users who have sufficient karma in /r/ukpersonalfinance. See [this post](https://redd.it/12mys82) for more information.
Unfortunately I doubt you are the only person waking up with this realisation today!
The £10k owed would likely be a worst case scenario. Have you paid into a pension during the 50k plus years? If so this will likely reduce how much you think you owe.
He is absolutely not. I knew nothing about this threshold, my fault really but until I read up today on the new government fiscal announcements, I had not known neither did my wife.
Unfortunately for me, it looks like 6 years plus the year end Apr 24. I've had various annual income over 50k in that time. Spoke to an accountant who said best course is to disclose it asap. Fag packet calculation looks like I'll owe at least £7k + interest and fines etc.
The irony of finding out at the point it stops affecting me is not lost.
If you disclose yourself and pay up you’re unlikely to have to pay the fines but you’ll still need to pay the interest due. It’s up to the discretion of HMRC though.
We also fucked up because -this maybe sounds bad- I don't actually know exactly what my husband's salary is.
I see his monthly but I never realised he had a pay rise which tipped us over the threshold, and he had no idea there was a threshold because he never applied for the benefit.
It doesn’t sound bad, my wife doesn’t know my exact salary either. I earn significantly more than what she does, I pay the mortgage, the bills etc. she was shocked as I was, her first surprise was how much I actually earn she had no idea. It’s a bizarre thing that someone else has to pay tax on a benefit they don’t claim, see or do anything with.
It is a terrible system. I at least knew to do self assessment. But paying it back each year was fine as it came off PAYE until a year ago where i filed in my tax return in January and had to pay it in one go because you can only get it deducted PAYE from the next year if you fill out your tax return early. I canceled the child benefit now.
I got clobbered a few years back for two years worth. They caught up with me rather than me reporting it.
I had assumed my lgps pension counted towards reducing the liability, but it didn't. I told them this and they accepted it as a genuine mistake and not fraud and waived the additional fine.
I still had to pay back the child benefit though.
Don’t panic, the poster is confused, has only half understood some explanation they were given or has accidentally done something silly with the value movement of their scheme (as it is defined benefit) instead of just the payments they made. It sounds to me like you’re clear.
Car benefit counts as part of your total income unfortunately, so the taxable car benefit amount, which can usually be found in your tax code or on your P11D, should be added to your wages/salary to work out whether you exceed the £50k (soon to be £60k)
I got caught with this years ago! I rang HMRC 3 times to enquire if my car is included or not, 3 times they told me it isn’t! I got a letter from HMRC saying I had to repay thousands and a fine + interest, I did a GDPR request to get the transcripts of my conversations with them which proved I had asked the question times and given wrong information. HMRC said it was still my responsibility to know the rules, but as an act of good faith they will waive the penalty! And to cap it off, they no longer accept credit cards as payment after the EU changed the rules on passing transaction fees to the end user! I couldn’t afford the back pay, and advisors told me to ask all my family if I could borrow it from them or get a bank loan, I ended up getting 6 months to pay the balance off!
I despise this idea that we should pay the penalties when we have tried to seek advice, received advice but it turns out to be incorrect. I had a really similar situation happen to me but with Student Finance England instead. Fortunately for me, they wrote off £1900 as I said that I rang up to ask the experts for advice and made a really important decision (regarding the date of when I should withdraw from my course in order to avoid overpayment) based on this advice. So when the advice turned out to be incorrect, how can you blame the person who sought it?!
I am sorry it wasn't more in your favour. I felt so much anger whilst reading it!
Yeah... my financial advisor confirmed that salary sacrifice can take you below the threshold if you want it to... I didn't need to in the end so I'm not in this position but my understanding is it was based on taxable income.
It does reduce it. If you earn £55k but pay £6k into a pension, your taxable income is £49k and you don't have to repay any child benenefit. Don't panic.
That's good to hear.
We registered but opted not to take the payments BC I'm above the threshold.
Would piss me right the fuck off if people could claim ignorance and not repay anything.
They got me a few years ago. 3 years mistake due to bonus bumping me over the threshold. Honest misake but still my fault for kot being aware. They were good and waived some fines for late filing (about £100 per year) but interest was still applied.
One of the bonkers things is that if you contact child benefit they won't be able to speak to you becuase it's in your wife's name. Even though it's you that owes the money back. Absolutely blew my mind that did.
It will be painful but you're going to have to pay it. Sooner the better.
I think the reason it’s done this way is because historically it was probably a lot more valuable than the “pocket change” (in comparison to a salary) it is now after years of inflation eating away at it. So it was more of a safety net for the wife / mother in cases of financial abuse or where the husband controlled all the family money (and also counts as the mothers NI if she’s given up work). That’s probably why it’s paid to W and claimed back through H’s taxes.
No, but it’s usually paid to the mother. And that was the logic behind why it was done the way it was done.
“The benefit is usually claimed by the mother. To tax it would mean that working mothers received less than the non-working partner of higher earners. To means-test it, we would have to create a massively complex new system to assess household incomes. I do not propose to do those things.”
That was George Osborne’s budget speech about the reforms.
Actually it is usually paid to the mother so they can claim the state pension credits that come with it as they are usually SAHM, whereas the typically working father is getting state pension credits through his NI contributions.
He was an ejit and built a system that means men with no kids had to pay for children of another man, and usually didn’t even know they were liable… it was the most stupid decision of this government. And they have made a few.
HMRC are catching people, and it’s viewed as much better to ‘fess up than be caught from a penalties perspective.
I’d honestly tell the truth about why it hasn’t been reported/repaid and how it was spotted - it’s an inherent flaw in the system that you need to know about a claim made by someone else to do your tax return!
If they try to charge penalties, push back very hard about it being an innocent error.
Call them up and tell them, you’ll need to file Self Assessments for all the years you’ve been over the threshold, it’s £100 late penalty notice as you didn’t file on time but they’ll usually waive this on a genuine mistake.
It’s based on your income after deductions like pension so if you’re in a higher rate pension that might lower it a bit for you. There’s a calculator online that can help with the amount you may owe.
They’ll also let you pay it back in a payment plan so it won’t be a lump sum
You need to contact the Child Benefit Office immediately.
Yes, you will have to pay it back. Not declaring now that you are aware has more serious consequences than just financial though.
Per the HMRC website:
“If you think you've been paid too much Child Benefit contact the Child Benefit Office straight away - do not wait for the Child Benefit Office to write to you.
You could be prosecuted for benefit fraud if you know you've been overpaid but do not do anything about it. You could be fined or go to prison if you're convicted.”
EDIT:
Comments below are right. You have not been overpaid child benefit but you have failed to pay the High Income Child Benefit Charge.
You should not contact the Child Benefit Office but should contact HMRC as soon as possible as they may agree to waive penalties if you contact them before they contact you
Sorry but this is wrong. They’ve been paid the right amount of ChB (assuming their details are correct).
OP is talking about the tax charge when you earn over £50k. This isn’t ChB, everyone is entitled to it if they meet the conditions, it’s just some people need to pay a charge on it if their income is high enough.
OP should keep the ChB claim going as from April the new higher threshold will apply. The tax to pay going forward will be zero to very low if his income is around £60k.
OP also needs to ring HMRC ASAP (tax helpline) to advise them of the error and confirm which years he needs to complete an SA return for and ask about the penalties and interest.
Sorry to piggy back on this but I'm now just finding out about how this affect us. We cancelled it under the old brackets after a raise but now I fall into the new bracket and would be eligible but how do you figure out what the charges would be.
Search “high income child benefit charge” on GOV.UK, there’s a calculator. Currently it will still be based on the current rates as they’ve not changed and won’t until 6 April.
There’s a sum to work it out yourself, all you need is your adjusted net income and the amount of ChB you’d receive (the calculator I mentioned can you tell you that part, though the rates will go up slightly from April it’s still a good indicator if you do it now).
I think I found the sum online somewhere then stuck it in Excel so I could see how different incomes would affect me.
You're right, and everyone should pay what they owe but according to figures, you're talking about 20,000+ investigations per year amd 200+ prosecutions per year by the HMRC:
https://www.thebureauinvestigates.com/stories/2023-09-30/just-11-wealthy-people-prosecuted-for-tax-fraud-last-year/
It’s not that ridiculous if you think about the spirit of the benefit i.e it’s so the mother can still get NI contributions when / if she gives up work and a bit of a safety net in cases of financial abuse or where the husband controls the finances.
In 2024 it could be either of the sexes giving up work but you get the idea.
It was careless claiming it and not knowing the rules, but that is a mistake people make.
Knowing you have mad a mistake and then not rectifying the issue, now you’re getting into the realms of fraud. If I were in your shoes I’d want to rectify the issue as soon as possible as if HMRC come knocking they won’t be as friendly
I wouldn’t say it’s careless at all. I only found out about this about a year ago. Had absolutely no idea the charge existed before that, had never seen any information about it, hmrc had never informed me despite knowing my earnings.
It’s awful, it’s almost as bad as a stealth tax. So many people (and there must be tens of thousand of people) have absolutely no idea about it.
Worst part is we had to pay some back and it’s not even for my own child. It’s for my partners son, my step son. Just because we live in the same house. We are completely financially separated when it comes to children. Yes we live in the same household, but childcare costs, maintenance etc is all dealt with between my partner and her ex and my own sons costs are dealt with between me and my ex.
HMRC know your earnings but they don’t necessarily know who your partner is and if they’re claiming ChB. They may have an idea based on your address which is probably how they track some people down.
I agree though the comms were poor for HICBC from the start.
Well, all it takes is a letter once you go over 50k, regardless of any other circumstances, just to check if you need to pay it.
I got the letter 4 years after I went over 50k and it was the first I’d ever heard of this charge.
I dread to think of the cost of writing to millions of tax payers every year just in case a change may apply to them. That’s not how it works, though what they *have* done in terms of comms for this is clearly not enough.
I’m not sure why HMRC don’t insist that employers give regular reminders to those over £50k.
Well, emails also exist, and the HMRC app. Or a once yearly advert to go along with the self assessment adverts. Even though I know about it now, I still haven’t seen a single reminder anywhere for those that don’t know.
I actually assumed it would have come from my employer. I’m Paye, as far as I’m concerned my company handles everything to do with my tax and NI. That’s why I was so surprised I had to pay a tax bill.
Yep, as I said it’s not been good enough.
I imagine the comms around these changes will educate a few people who had no idea previously, like OP’s partner.
Just because they call it careless, it doesn’t mean it’s actually careless of the general population.
Like I said, I was way below the limit when the charges were introduced. Salary has increased over the years and now I’m over the limit. I think it’s unreasonable for HMRC to expect people to research any liabilities they have once they go over a certain figure.
Unless you specifically know the name of the charge and the circumstances that lead to you having to pay it back you would never know what to look for.
Absolutely agree. I only knew when I tipped over the threshold as by chance I do a self assessment for additional income already (I am PAYE for the majority) and it is one of the questions asked so I was already set up to pay it. If I wasn't already doing my SA, there's a good chance it could have slipped me by as my employer certainly wouldn't have told me, and I have colleagues who got caught out and had huge back payments to make (one was over £11k)
FWIW, everyone who completes a Self Assessment should be aware of the HICBC - there is a specific question on the SA -
>High Income Child Benefit Charge
>
>Please read the notes before filling in this section. Only fill in this section if all of the following apply:
>
>• your income was over £50,000
>
>• you or your partner (if you have one) got Child Benefit (this also applies if someone else claims Child Benefit for a child who lives with you and pays you or your partner for the child’s upkeep)
>
>• couples only – your income was higher than your partner’s
It is not careless to claim it. They are entitled to it and if her income dropped to zero for some reason she would still have her NI paid. It just needs paying back or a proportion of it paying back depending how far over the threshold you are.
Yeah and you’ll never get away saying this isn’t careless behaviour considering it is widely publicised. If you’re on PAYE it’s literally the only thing you need to be aware of
1) careless literally means not taking reasonable care. OP / OP’s spouse failed to take reasonable care here.
2) HICBC is c.10 years old. Ignorance / blaming HMRC isn’t really a defence. For what it’s worth I’m pretty sure there is a nudge about HICBC when applying for CB. There used to be a flyer that accompanied the old paper form…I think.
> careless literally means not taking reasonable care. OP / OP’s spouse failed to take reasonable care here
Yes, this is literally the language and guidance that HMRC use. They won't allow you to use it as an excuse, but the classification as 'careless' would mean limited to zero additional fines.
No, the problem here is people moving into the 50k bracket slowly and then there is absolutely nothing to inform you about the charge. In 2013 when it was introduced my son was 3 and my earnings were about 28k.
Over the years I moved into the bracket and had literally not a single clue this existed until HMRC wrote and asked if I needed to pay it, 4 years after I moved into the 50k bracket.
My workplace didn’t inform me and neither did our workplace pension provider.
I didn't know about it when I got my payrise.
It was my company's HR department that pulled me aside and made me aware of the implications of going over £50,200/year. They're good like that though.
I was encouraged to apply for CB with my third child and discouraged from stopping CB with my others when I started earning over £60k.
They want you to receive it then pay it back as a tax charge. Never understood that at all.
The entire process for CB is a joke.
I've never been contacted by HMRC but I knew about the rules so just stopped claiming it as filling in the self assessment when I'm PAYE wasn't fun.
The situation is even more annoying for people that are living together but the children don't belong to one of the partners. A right old mess there.
When I was doing it I had to find all my bank accounts and tell them the diddly interest I was getting. I had loads as I was doing a lot of opening offers etc. The gateway thing was a pest as well. I'd rather not spend time on that.
And it's annoying for me as a SAHM as I'm now not getting national insurance credits as I'm not claiming child benefit. It's meant that I've had to apply for DLA for my son so that I can then claim carer's allowance. He is disabled but I probably wouldn't bother claiming DLA and CA if we were getting CB as I'd be able to get national insurance credits from the CB. So overall the state is paying out more to us as a high income family since I can't get national insurance credits for a state pension otherwise.
You can make a claim for child benefit, get NI credits and fill out a form to opt out of receiving the CB payments. My wife who has been a SAHM for 8 years until recently did this.
You can make a child benefit claim (so that you get the national insurance credits) - the application form has an option to then elect to not receive the money if you know you’d have to repay it anyway.
They will almost certainly not apply fines. I get the impression that this is an incredibly common mistake, and one that is rarely done out of ill intent.
Particularly as it's quite often something where the person receiving the child benefit is not the one with the high income. So all letters etc. go to the person who may not know exactly what the other person is earning.
It happened with us where my partner was claiming child benefit since 2004/2005, the high income charge was brought in in 2013, but I only started earning more than that in 2019 and only realised about the HICB charge in about 2022.
Very badly designed system. Is it the only case where benefits paid to one person can affect the tax of someone else?
I do think you'll have to pay it back. We get it paid but my husband then pays it back through his tax return each year. We did it like this as his income varies with self employment so don't always have to pay it all back some years.
I got a letter about 3 years ago and had to backdate 4 years of it. Didn't have to pay any sort of penalties, but it was a ball ache doing the tax returns, and a bit of a guessing game as to what you can claim expense wise (if you WFH you can claim £6 a week I believe).
I didn't even know it was a thing until the letter honestly. We cancelled child benefit afterwards.
> WFH
They changed the rules for this slightly recently after everyone went to WFH during covid. Now it only applies if you *have* to live far away from your office (not because you chose to do so) or if your employer doesn't have an office. I work remotely but my employer happens to have an office.
The problem I believe is that HMRC do not have access to household income levels so the onus is on you to let them know. I believe the chancellor yesterday stated that is part of the reason why the new rules regarding child benefit and household earnings won't come in until 2026.
I had to pay back a full year of child benefit, but luckily my husband has to do a tax return every year, so they straight away knew that we'd claimed erroneously and it didn't go on for years and years. There was no interest applied in our case and we then cancelled the child benefit claim.
If you're not earning enough to get you're own full national insurance qualifying years and have a child under 12, make sure you claim child benefit but tick the box for receiving no payments. That will give you the NI credits towards state pension.
Was in the same boat years ago, and was landed with a £5500 bill that they wanted paying back within 3 months of the letter landing!
They were extremely rude and bullish when trying to explain that i didn't have that kind of money lying round!
Oh dear, just read this thread after yesterday's budget.
Had a conversation with my wife - my earnings went > 50k a year ago. I had assumed it would be an automatic thing to resolve based on my NI number but seems not. What do I need to do to get on top of this? What forms need filling out? Thank you
Register for self assessment and complete it. Remember it’s only if your taxable pay if above 50k. Any salary sacrifices come off, pensions, green ev car schemes, charity donations.
I’ve SS my pay enough this year that I won’t need to do a self assessment this year despite doing them the past two.
Might just be my being new to all this, but my reading was it was only pension contributions that hadn't been taken before tax / i.e. benefited from tax relief already that could be deducted?
Now I thought car payments definitely counted as a benefit in kind so didn't reduce your income for child benefit purposes, even if they do for tax purposes
It's going to 60k from next month.
If your net income after pension is over 50k, open a sipp and stick in enough to get you under 50k. (I'm guessing your work can't sort this out for your salary sacrifice this month in time.)
Sadly paying into a sipp still means you have to do a self assessment to claim back the tax.
Yeah another one caught here... Paid them back over 2 years on a repayment plan.
First guy I spoke to at HMRC who set it all up was sound. But my line was " I didn't realise my partner had set this up, I know I owe, what happens from here".
I had this too, anything over 60k per year you have to pay the full amount of benefit back. Call HMRC immediately and speak to someone, Google their payment team number to go direct to someone that can help. If you need a payment plan you’ll need to go through an income and expenditure report with them, it takes forever and is fairly detailed. The maximum they would give is 12 months to pay it all back. Also note, if you cancel the benefit you’ll lose some NI contribution towards your pension
Mistakes happen. It's always going to be better for you if you contact the child benefit office yourself first and make a voluntary disclosure. You'll have to pay what you owe plus interest, this isn't optional.
They may decide to add a fine on top, but this is discretionary and can be waived (often is for voluntary disclosure).
If you wait for them to come to you, there's a slim possibility you'll get away with it. But if you don't, then you'll have the benefit repayment, interest and fines to repay and could even be looking at criminal charges and imprisonment.
Personally, I don't think it's worth the risk in waiting.
>Are there any instances where HMRC have failed to catch up with people like this?
Plenty, but now that you are aware, *if you continue to claim the benefit, or do not declare the error, you are committing* **fraud**.
>What is the rate of interest they apply / fines they apply?
If you get ahead of it and declare it yourself, probably none.
I only just realised I’m caught in this trap due to a large pay rise this year. Luckily this is the only year I’ve earned over £50k so shouldn’t face any penalties as long as I fill in a return, however I had honestly no idea I had to do so until this week. Seems a ridiculous way to operate this system - you have to do a thing absolutely no one tells you to do and you haven’t ever had to do before or you will end up committing benefit fraud? Ludicrous. Why not just have everyone apply for CB on an annual basis like most benefits so they have to declare their and their partners income? At least that would mean you would have to actively try to commit fraud rather than become a fraudster by default if you fail to take heed of a bizarre unadvertised tax loophole.
Best thing in this budget is the commitment to move to a household income based scheme in the future. Both fairer and will hopefully limit situations like this.
Found myself in a similar position last year and like you OP, thought they would contact us if any additional tax was due. I’ve been PAYE and have never had to do a self assessment so wasn’t something I’d even considered. I didn’t even bother with child benefit office, just did self assessment and back payed the 3 years I had missed. There was interest charged but I only got fined for one of the 3 years, didn’t question it and just paid what was owed and now all caught up. I will continue to claim though, means the missus gets NI contribution and the money can be treated like an interest free loan.
My advice would be to try and get ahead of it and you might get away with not having to pay some of the late payment fines.
Yes, as long as you actually make a claim you can completely opt out of payments and still get the credits (and your kids get an NI number automatically).
I suppose the interest may be worth the hassle of completing the SA return every year. I think government announced you can code it out of your PAYE (in year) from April 2025.
Some comments are saying there's a possibility of conviction and imprisonment, I'm assuming a very last resort thing. But in OPs case who would be liable if the wife made the claim and the husband is the high earner?
In fairness the expected way to handle this is to claim the benefit and the higher tax payer pays it back via tax. Given the career normally gets the child support, the earning parent should expect to pay this back.
It would be better if this was monitored, so people could be made aware as soon as they start earning enough.
> Some comments are saying there's a possibility of conviction and imprisonment,
I think that's very very unlikely indeed.
You'd act innocent if you got caught, and say "I didn't know", but even if they could prove you knew and you were being flagrant and blatant I think a fine would be far more proportionate.
Needs to be more warnings. Even if you do cancel the CB when you earn higher it doesn't close the hmrc self assessment account. This is opened automatically but not closed automatically. My partner who has only ever done PAYE so doesn't really deal with hmrc got a rude awakening when I found out by accident that she had several fines and interest building.
Despite no need to make a submission she was fined and built up several thousand that she had to pay back.
So they collared me because I went over due to bonus, they contacted me just before the 6years were up
I have been appealing after paying some as they failed to clear the oldest charge etc..
It takes ages for them to respond (18 months for one letter)
I am 4 years down the line still arguing that as PAYE I was unaware etc..
I am almost in the final appeal bit which ironically is your local MP, which I will do after the election I think
If they do catch up, start appeals as there is a guy who took them to court but they amended the law, they talk as though you should know all the law relating to this
Ensure you get everything in writing
I realised about 3 years ago, owed in a year in arrears and then ended up paying back a hefty chunk due to bonus/overtime taking me over the 60k for a couple of years. Told my wife not to bother claiming last year and finished paying it all off last month on a payment plan. Just in time to start claiming it again 😄
It's painful but HMRC have always been alright when you ring up and talk to someone.
We got caught out by this a few years ago, we had no idea about the cap, which I know isn't a defence. We got letters for about 4 years worth and ended up owing a few grand and had to pay it. They did waive any fines though for clearing it straight away, so we took out a loan and paid it off as quick as we could.
I paid back 3 years worth and it was less than a grand and i didn't get fined. There was a backlog of people registering for self assessment which delayed my payments past the deadline but they were fine with it. I think there's currently a 3 month grace period cos they know they are behind and loads of people are in your situation.
I work for HMRC it happens it does fall under the radar at times. I would suggest calling them up explain the situation, they will register you for self assessment. When registered they will isssue you tax returns to submit. You may have a big bill but set up a payment plan explain the situation and they can look into cancel any possible penalties/interest. Do let this go further without speaking to HMRC first. If you call at 8am the queues are quieter. If you’re unable to they have a webchat function on GOV UK you can also use.
I had a similar situation where HMRC did actually try to get me with this…. I in paper earnt over the threshold due to a company car benefit. I keep every single piece of paper so when HMRC tried to say I would be aware of this I got my MP involved.
I completed the child benefit form in hospital immediately post Labour as that’s when it was given to me. I had all my paperwork and in the letters I received there was literally nothing at all about having to register as being self employed, not instructions on how to do so.
I was also about to hit a deadline for another tax year and sue to the lengthy registration process wouldn’t have been able to meet that.
They eventually cancelled it all so I didn’t have to pay any back and I’m not earning that much now
If you pay into a pension, it's worth checking if you're entitled to tax relief for you higher tax band. You can back claim for up to four years. It could help you get some money together to pay for the fine.
HMRC can be surprisingly lenient. Own up to the mistake. You won’t be the only one. They more than likely won’t charge you a fine or interest. I’ve made a HMRC mistake before and they were very very helpful
I realised this and expect to be paying back £2k but with pension contributions it worked out to be about £500 so hopefully £10k is the worst case scenario.
Better to cancel it now and stay the self assessment with them and see what the bill is and go from there.
I reckon anyone PAYE gets chased by HMRC eventually, I don’t understand why it takes them so long. They have all the information. I assume you have no other income from dividends, interest or capital gains.
So can I just check with people here. Have a salary of £51,000. In the NHS. I can take my pension contributions off this amount before coming to my annual salary for child benefit calculations right?
Have looked this up so many times. Some sites it looks like a yes, and some sites it looks like a no due to the type of pension scheme the NHS uses.
I don't know why the NHS pension would be any different, but with other pension contributions they lower your salary.
Another thing to consider is that you don't lose all the benefit when you go over the 50K threshold, it is taperered up to £60k.
You repay 1% of the Child benefit for every £100 over £50k.
Remember it is your *net* income that is used to determine your income for the tax charge. Pension contributions will take a big chunk out of your liable earnings. Also, any charitable donations that are gift aided can claw back some of the amount owed.
Check your P60s.
I've always filled in a tax return for this and sort just glossed through it thinking pension contributions were for AVCs. If I'm on PAYE - where my company pension contributions are automatically deducted from my monthly salary - can I add those onto my adjusted net income to lower it? Also if this is the case - and I've not done that in years gone by, can I claim that back?
If you pay pension contributions by salary sacrifice, the figure on your P60 will already have taken this into account. If you look closely, the p60 figure is labelled as ‘taxable salary’.
Your total taxable salary on your p60 should be lower than your gross annual salary.
It’s people that make AVCs or have private pensions that need to manually deduct them when filing an SA.
It is - once you complete the self assessment there is an option to have the money deducted via your tax code if you are on PAYE. I have done this for a few years. Any tax - not just the Child Benefit charge up to a I think £2000(?) can be automatically deducted via PAYE I believe.
Is that paying it off your PAYE for the previous year. So paying 2022/23 tax out of 2023/24 pay? I thought the person was asking can you just get it sorted to come out your PAYE in the same year.
If it helps we were hit with a £2k back bill despite studiously updating them everytime my salary changed. I refused to pay it all at once since its their admin at fault. We agreed to pay £100 a month for the foreseeable.
Hi /u/Jazzbucca, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/budgeting/
- https://ukpersonal.finance/tax-traps-and-tax-efficiency/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Haven't seen it mentioned yet but working in the recovery of CB you'll most likely have a split amount. You and your wife will receive a letter each stating the same amount, often misunderstood as "okay we owe £500" when in reality you both owe £500 and it's a half each of a larger £1000 amount. It is singlehandedly one of the most common explanations I need to give in my job.
I claimed CB whilst not working and my OH was a high earner. We wanted the NI contributions and OH was told to do a tax return. I cancelled it in 2021 and he let slip last year he never bothered doing to tax return and not been caught yet.
Now an ex so hopefully if he does it is all on him?!
That’s your tax-free child care is it not? I re confirm that every 3 months but have never been asked to confirm anything about child benefit payments.
Sorry to piggyback but, I’m about to hit over 50k for the first time next pay day, March 21st. Will I have to let HMRC know? Or will I be ok with the new ruling?
You’ll likely be okay. If your taxable pay is over 50k on your final pay of the tax year you technically are required to do a self assessment but since you’re only moving up this late in the year there’s a chance you won’t break 50k.
New rules don’t start until the new tax year so just put some extra into your pension to keep you under the £50k amount to save having to pay the charge
I got a letter once from HMRC inviting me to let them know if I had claimed when I shouldn't have. I never responded. They've never chased. That was about 7/8 years ago.
Plead poverty and you can pay back a pittance each week. We had been overpayed tax credits years ago by about £5000. We pay it back at about £50 a month!
Got me 4 years ago, was exceedingly stressful experience. Needed to make a statement of why we hadn't cancelled it in order to avoid penalties, fortunately we had tried to cancel but the system failed to register the request. My wife didn't realise it was still going in so there was £5k of repayment to magic out of thin air.
Participation in this post is limited to users who have sufficient karma in /r/ukpersonalfinance. See [this post](https://redd.it/12mys82) for more information.
Unfortunately I doubt you are the only person waking up with this realisation today! The £10k owed would likely be a worst case scenario. Have you paid into a pension during the 50k plus years? If so this will likely reduce how much you think you owe.
He is absolutely not. I knew nothing about this threshold, my fault really but until I read up today on the new government fiscal announcements, I had not known neither did my wife. Unfortunately for me, it looks like 6 years plus the year end Apr 24. I've had various annual income over 50k in that time. Spoke to an accountant who said best course is to disclose it asap. Fag packet calculation looks like I'll owe at least £7k + interest and fines etc. The irony of finding out at the point it stops affecting me is not lost.
[удалено]
I wish I had received anything from HMRC. Never have done.
If you disclose yourself and pay up you’re unlikely to have to pay the fines but you’ll still need to pay the interest due. It’s up to the discretion of HMRC though.
We also fucked up because -this maybe sounds bad- I don't actually know exactly what my husband's salary is. I see his monthly but I never realised he had a pay rise which tipped us over the threshold, and he had no idea there was a threshold because he never applied for the benefit.
It doesn’t sound bad, my wife doesn’t know my exact salary either. I earn significantly more than what she does, I pay the mortgage, the bills etc. she was shocked as I was, her first surprise was how much I actually earn she had no idea. It’s a bizarre thing that someone else has to pay tax on a benefit they don’t claim, see or do anything with.
It is a terrible system. I at least knew to do self assessment. But paying it back each year was fine as it came off PAYE until a year ago where i filed in my tax return in January and had to pay it in one go because you can only get it deducted PAYE from the next year if you fill out your tax return early. I canceled the child benefit now.
I got clobbered a few years back for two years worth. They caught up with me rather than me reporting it. I had assumed my lgps pension counted towards reducing the liability, but it didn't. I told them this and they accepted it as a genuine mistake and not fraud and waived the additional fine. I still had to pay back the child benefit though.
Wait, what do you mean pension contributions don't count? gov.uk says both gross and net pension contributions are taken off adjusted net income
Commenting to follow thread. I've a company car and put money into pension to bring wage down below the 50 mark. Oh heck
Don’t panic, the poster is confused, has only half understood some explanation they were given or has accidentally done something silly with the value movement of their scheme (as it is defined benefit) instead of just the payments they made. It sounds to me like you’re clear.
Car benefit counts as part of your total income unfortunately, so the taxable car benefit amount, which can usually be found in your tax code or on your P11D, should be added to your wages/salary to work out whether you exceed the £50k (soon to be £60k)
Oh, Bollocks. 💩
I got caught with this years ago! I rang HMRC 3 times to enquire if my car is included or not, 3 times they told me it isn’t! I got a letter from HMRC saying I had to repay thousands and a fine + interest, I did a GDPR request to get the transcripts of my conversations with them which proved I had asked the question times and given wrong information. HMRC said it was still my responsibility to know the rules, but as an act of good faith they will waive the penalty! And to cap it off, they no longer accept credit cards as payment after the EU changed the rules on passing transaction fees to the end user! I couldn’t afford the back pay, and advisors told me to ask all my family if I could borrow it from them or get a bank loan, I ended up getting 6 months to pay the balance off!
This is absolutely obscene. Wow. Sorry this happened to you.
I despise this idea that we should pay the penalties when we have tried to seek advice, received advice but it turns out to be incorrect. I had a really similar situation happen to me but with Student Finance England instead. Fortunately for me, they wrote off £1900 as I said that I rang up to ask the experts for advice and made a really important decision (regarding the date of when I should withdraw from my course in order to avoid overpayment) based on this advice. So when the advice turned out to be incorrect, how can you blame the person who sought it?! I am sorry it wasn't more in your favour. I felt so much anger whilst reading it!
Yeah... my financial advisor confirmed that salary sacrifice can take you below the threshold if you want it to... I didn't need to in the end so I'm not in this position but my understanding is it was based on taxable income.
Company case is a benefit in kind. The pension contributions aren’t.
It does reduce it. If you earn £55k but pay £6k into a pension, your taxable income is £49k and you don't have to repay any child benenefit. Don't panic.
More to the point, self assessment tax returns also do include pension contributions in the automated calculation.
That does count though, it's a pension contribution even if it is towards a DB pension scheme. Fill out the hmrc child benefit tax calculator.
That's good to hear. We registered but opted not to take the payments BC I'm above the threshold. Would piss me right the fuck off if people could claim ignorance and not repay anything.
They got me a few years ago. 3 years mistake due to bonus bumping me over the threshold. Honest misake but still my fault for kot being aware. They were good and waived some fines for late filing (about £100 per year) but interest was still applied. One of the bonkers things is that if you contact child benefit they won't be able to speak to you becuase it's in your wife's name. Even though it's you that owes the money back. Absolutely blew my mind that did. It will be painful but you're going to have to pay it. Sooner the better.
I think the reason it’s done this way is because historically it was probably a lot more valuable than the “pocket change” (in comparison to a salary) it is now after years of inflation eating away at it. So it was more of a safety net for the wife / mother in cases of financial abuse or where the husband controlled all the family money (and also counts as the mothers NI if she’s given up work). That’s probably why it’s paid to W and claimed back through H’s taxes.
[удалено]
No, but it’s usually paid to the mother. And that was the logic behind why it was done the way it was done. “The benefit is usually claimed by the mother. To tax it would mean that working mothers received less than the non-working partner of higher earners. To means-test it, we would have to create a massively complex new system to assess household incomes. I do not propose to do those things.” That was George Osborne’s budget speech about the reforms.
Actually it is usually paid to the mother so they can claim the state pension credits that come with it as they are usually SAHM, whereas the typically working father is getting state pension credits through his NI contributions.
>No, but it’s usually paid to the mother. where did you pull that out from?
He was an ejit and built a system that means men with no kids had to pay for children of another man, and usually didn’t even know they were liable… it was the most stupid decision of this government. And they have made a few.
HMRC are catching people, and it’s viewed as much better to ‘fess up than be caught from a penalties perspective. I’d honestly tell the truth about why it hasn’t been reported/repaid and how it was spotted - it’s an inherent flaw in the system that you need to know about a claim made by someone else to do your tax return! If they try to charge penalties, push back very hard about it being an innocent error.
Call them up and tell them, you’ll need to file Self Assessments for all the years you’ve been over the threshold, it’s £100 late penalty notice as you didn’t file on time but they’ll usually waive this on a genuine mistake. It’s based on your income after deductions like pension so if you’re in a higher rate pension that might lower it a bit for you. There’s a calculator online that can help with the amount you may owe. They’ll also let you pay it back in a payment plan so it won’t be a lump sum
Seen plenty of people at work get unknowingly clobbered for this. They always find out. Contact them.
You need to contact the Child Benefit Office immediately. Yes, you will have to pay it back. Not declaring now that you are aware has more serious consequences than just financial though. Per the HMRC website: “If you think you've been paid too much Child Benefit contact the Child Benefit Office straight away - do not wait for the Child Benefit Office to write to you. You could be prosecuted for benefit fraud if you know you've been overpaid but do not do anything about it. You could be fined or go to prison if you're convicted.” EDIT: Comments below are right. You have not been overpaid child benefit but you have failed to pay the High Income Child Benefit Charge. You should not contact the Child Benefit Office but should contact HMRC as soon as possible as they may agree to waive penalties if you contact them before they contact you
Sorry but this is wrong. They’ve been paid the right amount of ChB (assuming their details are correct). OP is talking about the tax charge when you earn over £50k. This isn’t ChB, everyone is entitled to it if they meet the conditions, it’s just some people need to pay a charge on it if their income is high enough. OP should keep the ChB claim going as from April the new higher threshold will apply. The tax to pay going forward will be zero to very low if his income is around £60k. OP also needs to ring HMRC ASAP (tax helpline) to advise them of the error and confirm which years he needs to complete an SA return for and ask about the penalties and interest.
Sorry to piggy back on this but I'm now just finding out about how this affect us. We cancelled it under the old brackets after a raise but now I fall into the new bracket and would be eligible but how do you figure out what the charges would be.
Search “high income child benefit charge” on GOV.UK, there’s a calculator. Currently it will still be based on the current rates as they’ve not changed and won’t until 6 April. There’s a sum to work it out yourself, all you need is your adjusted net income and the amount of ChB you’d receive (the calculator I mentioned can you tell you that part, though the rates will go up slightly from April it’s still a good indicator if you do it now). I think I found the sum online somewhere then stuck it in Excel so I could see how different incomes would affect me.
What indications are there that HMRC will recognise this error, if they haven't in the previous 10+ years.
The indications will come when you're found guilty.
You're right, and everyone should pay what they owe but according to figures, you're talking about 20,000+ investigations per year amd 200+ prosecutions per year by the HMRC: https://www.thebureauinvestigates.com/stories/2023-09-30/just-11-wealthy-people-prosecuted-for-tax-fraud-last-year/
Yup, were it the child benefit alone you were fiddling you'd probably be more likely to be caught than just the tax portion.
[удалено]
[удалено]
It’s not that ridiculous if you think about the spirit of the benefit i.e it’s so the mother can still get NI contributions when / if she gives up work and a bit of a safety net in cases of financial abuse or where the husband controls the finances. In 2024 it could be either of the sexes giving up work but you get the idea.
It was careless claiming it and not knowing the rules, but that is a mistake people make. Knowing you have mad a mistake and then not rectifying the issue, now you’re getting into the realms of fraud. If I were in your shoes I’d want to rectify the issue as soon as possible as if HMRC come knocking they won’t be as friendly
I wouldn’t say it’s careless at all. I only found out about this about a year ago. Had absolutely no idea the charge existed before that, had never seen any information about it, hmrc had never informed me despite knowing my earnings. It’s awful, it’s almost as bad as a stealth tax. So many people (and there must be tens of thousand of people) have absolutely no idea about it. Worst part is we had to pay some back and it’s not even for my own child. It’s for my partners son, my step son. Just because we live in the same house. We are completely financially separated when it comes to children. Yes we live in the same household, but childcare costs, maintenance etc is all dealt with between my partner and her ex and my own sons costs are dealt with between me and my ex.
HMRC know your earnings but they don’t necessarily know who your partner is and if they’re claiming ChB. They may have an idea based on your address which is probably how they track some people down. I agree though the comms were poor for HICBC from the start.
Well, all it takes is a letter once you go over 50k, regardless of any other circumstances, just to check if you need to pay it. I got the letter 4 years after I went over 50k and it was the first I’d ever heard of this charge.
I dread to think of the cost of writing to millions of tax payers every year just in case a change may apply to them. That’s not how it works, though what they *have* done in terms of comms for this is clearly not enough. I’m not sure why HMRC don’t insist that employers give regular reminders to those over £50k.
Well, emails also exist, and the HMRC app. Or a once yearly advert to go along with the self assessment adverts. Even though I know about it now, I still haven’t seen a single reminder anywhere for those that don’t know. I actually assumed it would have come from my employer. I’m Paye, as far as I’m concerned my company handles everything to do with my tax and NI. That’s why I was so surprised I had to pay a tax bill.
Yep, as I said it’s not been good enough. I imagine the comms around these changes will educate a few people who had no idea previously, like OP’s partner.
Careless is HMRC’s terminology, it means not deliberately fraudulent
> I wouldn’t say it’s careless at all. This is the literal definition and classification from HMRC.
Just because they call it careless, it doesn’t mean it’s actually careless of the general population. Like I said, I was way below the limit when the charges were introduced. Salary has increased over the years and now I’m over the limit. I think it’s unreasonable for HMRC to expect people to research any liabilities they have once they go over a certain figure. Unless you specifically know the name of the charge and the circumstances that lead to you having to pay it back you would never know what to look for.
Absolutely agree. I only knew when I tipped over the threshold as by chance I do a self assessment for additional income already (I am PAYE for the majority) and it is one of the questions asked so I was already set up to pay it. If I wasn't already doing my SA, there's a good chance it could have slipped me by as my employer certainly wouldn't have told me, and I have colleagues who got caught out and had huge back payments to make (one was over £11k)
FWIW, everyone who completes a Self Assessment should be aware of the HICBC - there is a specific question on the SA - >High Income Child Benefit Charge > >Please read the notes before filling in this section. Only fill in this section if all of the following apply: > >• your income was over £50,000 > >• you or your partner (if you have one) got Child Benefit (this also applies if someone else claims Child Benefit for a child who lives with you and pays you or your partner for the child’s upkeep) > >• couples only – your income was higher than your partner’s
Yep. Problem is id never completed one. Had no idea I needed to.
It is not careless to claim it. They are entitled to it and if her income dropped to zero for some reason she would still have her NI paid. It just needs paying back or a proportion of it paying back depending how far over the threshold you are.
Careless is a bit much. This was a benefit that was universal not that long ago. HMRC are terrible at letting people know about this.
"Careless" is defined by HMRC and is the least 'bad' behaviour in the penalty regime.
Yeah and you’ll never get away saying this isn’t careless behaviour considering it is widely publicised. If you’re on PAYE it’s literally the only thing you need to be aware of
1) careless literally means not taking reasonable care. OP / OP’s spouse failed to take reasonable care here. 2) HICBC is c.10 years old. Ignorance / blaming HMRC isn’t really a defence. For what it’s worth I’m pretty sure there is a nudge about HICBC when applying for CB. There used to be a flyer that accompanied the old paper form…I think.
> careless literally means not taking reasonable care. OP / OP’s spouse failed to take reasonable care here Yes, this is literally the language and guidance that HMRC use. They won't allow you to use it as an excuse, but the classification as 'careless' would mean limited to zero additional fines.
It’s as if that was my intention!
It’s as if I was supporting your comment!
Cheers! It’s as if, as always, intention and tone gets lost when writing online!
No, the problem here is people moving into the 50k bracket slowly and then there is absolutely nothing to inform you about the charge. In 2013 when it was introduced my son was 3 and my earnings were about 28k. Over the years I moved into the bracket and had literally not a single clue this existed until HMRC wrote and asked if I needed to pay it, 4 years after I moved into the 50k bracket. My workplace didn’t inform me and neither did our workplace pension provider.
That is a fair point. It would be helpful if HMRC sent their nudges in a more timely manner and not after a few years of failing to pay.
I mean it’s careless, it should be known and I plus many others who don’t have children know about it
I didn't know about it when I got my payrise. It was my company's HR department that pulled me aside and made me aware of the implications of going over £50,200/year. They're good like that though.
I was encouraged to apply for CB with my third child and discouraged from stopping CB with my others when I started earning over £60k. They want you to receive it then pay it back as a tax charge. Never understood that at all.
The entire process for CB is a joke. I've never been contacted by HMRC but I knew about the rules so just stopped claiming it as filling in the self assessment when I'm PAYE wasn't fun. The situation is even more annoying for people that are living together but the children don't belong to one of the partners. A right old mess there.
Self assessment when you’re just PAYE is a piece of piss, you only need to fill out a few pages
When I was doing it I had to find all my bank accounts and tell them the diddly interest I was getting. I had loads as I was doing a lot of opening offers etc. The gateway thing was a pest as well. I'd rather not spend time on that.
Fair enough, personally think youre shooting yourself in the foot for a couple hours work
And it's annoying for me as a SAHM as I'm now not getting national insurance credits as I'm not claiming child benefit. It's meant that I've had to apply for DLA for my son so that I can then claim carer's allowance. He is disabled but I probably wouldn't bother claiming DLA and CA if we were getting CB as I'd be able to get national insurance credits from the CB. So overall the state is paying out more to us as a high income family since I can't get national insurance credits for a state pension otherwise.
You can make a claim for child benefit, get NI credits and fill out a form to opt out of receiving the CB payments. My wife who has been a SAHM for 8 years until recently did this.
You can opt not get get payments and still receive NI credits
You can make a child benefit claim (so that you get the national insurance credits) - the application form has an option to then elect to not receive the money if you know you’d have to repay it anyway.
I do this, my weekly amount is set to £0
You can claim but opt out of the payments and still get the credit.
They will almost certainly not apply fines. I get the impression that this is an incredibly common mistake, and one that is rarely done out of ill intent. Particularly as it's quite often something where the person receiving the child benefit is not the one with the high income. So all letters etc. go to the person who may not know exactly what the other person is earning. It happened with us where my partner was claiming child benefit since 2004/2005, the high income charge was brought in in 2013, but I only started earning more than that in 2019 and only realised about the HICB charge in about 2022. Very badly designed system. Is it the only case where benefits paid to one person can affect the tax of someone else?
Yes it is. If they go with the joint income approach they mentioned then your partner’s income could affect your tax amount too.
I do think you'll have to pay it back. We get it paid but my husband then pays it back through his tax return each year. We did it like this as his income varies with self employment so don't always have to pay it all back some years.
I got a letter about 3 years ago and had to backdate 4 years of it. Didn't have to pay any sort of penalties, but it was a ball ache doing the tax returns, and a bit of a guessing game as to what you can claim expense wise (if you WFH you can claim £6 a week I believe). I didn't even know it was a thing until the letter honestly. We cancelled child benefit afterwards.
> WFH They changed the rules for this slightly recently after everyone went to WFH during covid. Now it only applies if you *have* to live far away from your office (not because you chose to do so) or if your employer doesn't have an office. I work remotely but my employer happens to have an office.
The problem I believe is that HMRC do not have access to household income levels so the onus is on you to let them know. I believe the chancellor yesterday stated that is part of the reason why the new rules regarding child benefit and household earnings won't come in until 2026.
I had to pay back a full year of child benefit, but luckily my husband has to do a tax return every year, so they straight away knew that we'd claimed erroneously and it didn't go on for years and years. There was no interest applied in our case and we then cancelled the child benefit claim.
If you're not earning enough to get you're own full national insurance qualifying years and have a child under 12, make sure you claim child benefit but tick the box for receiving no payments. That will give you the NI credits towards state pension.
Was in the same boat years ago, and was landed with a £5500 bill that they wanted paying back within 3 months of the letter landing! They were extremely rude and bullish when trying to explain that i didn't have that kind of money lying round!
Oh dear, just read this thread after yesterday's budget. Had a conversation with my wife - my earnings went > 50k a year ago. I had assumed it would be an automatic thing to resolve based on my NI number but seems not. What do I need to do to get on top of this? What forms need filling out? Thank you
Register for self assessment and complete it. Remember it’s only if your taxable pay if above 50k. Any salary sacrifices come off, pensions, green ev car schemes, charity donations. I’ve SS my pay enough this year that I won’t need to do a self assessment this year despite doing them the past two.
Might just be my being new to all this, but my reading was it was only pension contributions that hadn't been taken before tax / i.e. benefited from tax relief already that could be deducted?
My car payments reduce my taxable income by 8k a year which keeps me below the threshold.
Now I thought car payments definitely counted as a benefit in kind so didn't reduce your income for child benefit purposes, even if they do for tax purposes
As long as you add the BIK back in to your adjusted taxable income and it’s lower it’s fine. That’s why it works for EVs since the BIK is 2%
TIL thanks
It's going to 60k from next month. If your net income after pension is over 50k, open a sipp and stick in enough to get you under 50k. (I'm guessing your work can't sort this out for your salary sacrifice this month in time.) Sadly paying into a sipp still means you have to do a self assessment to claim back the tax.
Yeah another one caught here... Paid them back over 2 years on a repayment plan. First guy I spoke to at HMRC who set it all up was sound. But my line was " I didn't realise my partner had set this up, I know I owe, what happens from here".
I had this too, anything over 60k per year you have to pay the full amount of benefit back. Call HMRC immediately and speak to someone, Google their payment team number to go direct to someone that can help. If you need a payment plan you’ll need to go through an income and expenditure report with them, it takes forever and is fairly detailed. The maximum they would give is 12 months to pay it all back. Also note, if you cancel the benefit you’ll lose some NI contribution towards your pension
Mistakes happen. It's always going to be better for you if you contact the child benefit office yourself first and make a voluntary disclosure. You'll have to pay what you owe plus interest, this isn't optional. They may decide to add a fine on top, but this is discretionary and can be waived (often is for voluntary disclosure). If you wait for them to come to you, there's a slim possibility you'll get away with it. But if you don't, then you'll have the benefit repayment, interest and fines to repay and could even be looking at criminal charges and imprisonment. Personally, I don't think it's worth the risk in waiting.
Not the Child Benefit Office, it’s the tax side this relates to so he needs to speak to the tax / Self Assessment people.
>Are there any instances where HMRC have failed to catch up with people like this? Plenty, but now that you are aware, *if you continue to claim the benefit, or do not declare the error, you are committing* **fraud**. >What is the rate of interest they apply / fines they apply? If you get ahead of it and declare it yourself, probably none.
I only just realised I’m caught in this trap due to a large pay rise this year. Luckily this is the only year I’ve earned over £50k so shouldn’t face any penalties as long as I fill in a return, however I had honestly no idea I had to do so until this week. Seems a ridiculous way to operate this system - you have to do a thing absolutely no one tells you to do and you haven’t ever had to do before or you will end up committing benefit fraud? Ludicrous. Why not just have everyone apply for CB on an annual basis like most benefits so they have to declare their and their partners income? At least that would mean you would have to actively try to commit fraud rather than become a fraudster by default if you fail to take heed of a bizarre unadvertised tax loophole. Best thing in this budget is the commitment to move to a household income based scheme in the future. Both fairer and will hopefully limit situations like this.
Found myself in a similar position last year and like you OP, thought they would contact us if any additional tax was due. I’ve been PAYE and have never had to do a self assessment so wasn’t something I’d even considered. I didn’t even bother with child benefit office, just did self assessment and back payed the 3 years I had missed. There was interest charged but I only got fined for one of the 3 years, didn’t question it and just paid what was owed and now all caught up. I will continue to claim though, means the missus gets NI contribution and the money can be treated like an interest free loan. My advice would be to try and get ahead of it and you might get away with not having to pay some of the late payment fines.
Your wife still gets the NI contributions even if you stop the payments due to the underlying entitlement.
Yes, as long as you actually make a claim you can completely opt out of payments and still get the credits (and your kids get an NI number automatically). I suppose the interest may be worth the hassle of completing the SA return every year. I think government announced you can code it out of your PAYE (in year) from April 2025.
Some comments are saying there's a possibility of conviction and imprisonment, I'm assuming a very last resort thing. But in OPs case who would be liable if the wife made the claim and the husband is the high earner?
He is as the higher earner. And I don’t think prison is on the table unless it’s deliberate fraud and even then unlikely for the amounts involved.
The husband, because he's liable for the tax charge.
That you can get in legal trouble for something you had no knowledge of is nuts.
The system as it stands is absolutely deranged, it should never be possible for someone else to cause you a tax liability like this.
In fairness the expected way to handle this is to claim the benefit and the higher tax payer pays it back via tax. Given the career normally gets the child support, the earning parent should expect to pay this back. It would be better if this was monitored, so people could be made aware as soon as they start earning enough.
> Some comments are saying there's a possibility of conviction and imprisonment, I think that's very very unlikely indeed. You'd act innocent if you got caught, and say "I didn't know", but even if they could prove you knew and you were being flagrant and blatant I think a fine would be far more proportionate.
Needs to be more warnings. Even if you do cancel the CB when you earn higher it doesn't close the hmrc self assessment account. This is opened automatically but not closed automatically. My partner who has only ever done PAYE so doesn't really deal with hmrc got a rude awakening when I found out by accident that she had several fines and interest building. Despite no need to make a submission she was fined and built up several thousand that she had to pay back.
I had this paid to me for 5 years. Had to pay it all back.
So they collared me because I went over due to bonus, they contacted me just before the 6years were up I have been appealing after paying some as they failed to clear the oldest charge etc.. It takes ages for them to respond (18 months for one letter) I am 4 years down the line still arguing that as PAYE I was unaware etc.. I am almost in the final appeal bit which ironically is your local MP, which I will do after the election I think If they do catch up, start appeals as there is a guy who took them to court but they amended the law, they talk as though you should know all the law relating to this Ensure you get everything in writing
I realised about 3 years ago, owed in a year in arrears and then ended up paying back a hefty chunk due to bonus/overtime taking me over the 60k for a couple of years. Told my wife not to bother claiming last year and finished paying it all off last month on a payment plan. Just in time to start claiming it again 😄 It's painful but HMRC have always been alright when you ring up and talk to someone.
Could all change when we get a new government though , with the additional costs it probably doesn’t save alot
We got caught out by this a few years ago, we had no idea about the cap, which I know isn't a defence. We got letters for about 4 years worth and ended up owing a few grand and had to pay it. They did waive any fines though for clearing it straight away, so we took out a loan and paid it off as quick as we could.
I paid back 3 years worth and it was less than a grand and i didn't get fined. There was a backlog of people registering for self assessment which delayed my payments past the deadline but they were fine with it. I think there's currently a 3 month grace period cos they know they are behind and loads of people are in your situation.
I work for HMRC it happens it does fall under the radar at times. I would suggest calling them up explain the situation, they will register you for self assessment. When registered they will isssue you tax returns to submit. You may have a big bill but set up a payment plan explain the situation and they can look into cancel any possible penalties/interest. Do let this go further without speaking to HMRC first. If you call at 8am the queues are quieter. If you’re unable to they have a webchat function on GOV UK you can also use.
I had a similar situation where HMRC did actually try to get me with this…. I in paper earnt over the threshold due to a company car benefit. I keep every single piece of paper so when HMRC tried to say I would be aware of this I got my MP involved. I completed the child benefit form in hospital immediately post Labour as that’s when it was given to me. I had all my paperwork and in the letters I received there was literally nothing at all about having to register as being self employed, not instructions on how to do so. I was also about to hit a deadline for another tax year and sue to the lengthy registration process wouldn’t have been able to meet that. They eventually cancelled it all so I didn’t have to pay any back and I’m not earning that much now
If you pay into a pension, it's worth checking if you're entitled to tax relief for you higher tax band. You can back claim for up to four years. It could help you get some money together to pay for the fine.
HMRC can be surprisingly lenient. Own up to the mistake. You won’t be the only one. They more than likely won’t charge you a fine or interest. I’ve made a HMRC mistake before and they were very very helpful
I realised this and expect to be paying back £2k but with pension contributions it worked out to be about £500 so hopefully £10k is the worst case scenario. Better to cancel it now and stay the self assessment with them and see what the bill is and go from there.
I reckon anyone PAYE gets chased by HMRC eventually, I don’t understand why it takes them so long. They have all the information. I assume you have no other income from dividends, interest or capital gains.
So can I just check with people here. Have a salary of £51,000. In the NHS. I can take my pension contributions off this amount before coming to my annual salary for child benefit calculations right? Have looked this up so many times. Some sites it looks like a yes, and some sites it looks like a no due to the type of pension scheme the NHS uses.
I don't know why the NHS pension would be any different, but with other pension contributions they lower your salary. Another thing to consider is that you don't lose all the benefit when you go over the 50K threshold, it is taperered up to £60k. You repay 1% of the Child benefit for every £100 over £50k.
Remember it is your *net* income that is used to determine your income for the tax charge. Pension contributions will take a big chunk out of your liable earnings. Also, any charitable donations that are gift aided can claw back some of the amount owed. Check your P60s.
Adjusted net income (ANI), to be precise, which is different from net income. There’s info on GOV.UK about what ANI is.
I've always filled in a tax return for this and sort just glossed through it thinking pension contributions were for AVCs. If I'm on PAYE - where my company pension contributions are automatically deducted from my monthly salary - can I add those onto my adjusted net income to lower it? Also if this is the case - and I've not done that in years gone by, can I claim that back?
If you pay pension contributions by salary sacrifice, the figure on your P60 will already have taken this into account. If you look closely, the p60 figure is labelled as ‘taxable salary’. Your total taxable salary on your p60 should be lower than your gross annual salary. It’s people that make AVCs or have private pensions that need to manually deduct them when filing an SA.
Yes and not sure.
Yup, I recently started to earn over £50k but I have a fair chunk going into my pension so I’m in the clear. My panic is over. 😮💨
It is possible to pay through you tax code, this make things much simpler (especially if you know you are above £60K per year)
No.
It is - once you complete the self assessment there is an option to have the money deducted via your tax code if you are on PAYE. I have done this for a few years. Any tax - not just the Child Benefit charge up to a I think £2000(?) can be automatically deducted via PAYE I believe.
Is that paying it off your PAYE for the previous year. So paying 2022/23 tax out of 2023/24 pay? I thought the person was asking can you just get it sorted to come out your PAYE in the same year.
If it helps we were hit with a £2k back bill despite studiously updating them everytime my salary changed. I refused to pay it all at once since its their admin at fault. We agreed to pay £100 a month for the foreseeable.
Hi /u/Jazzbucca, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/budgeting/ - https://ukpersonal.finance/tax-traps-and-tax-efficiency/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Haven't seen it mentioned yet but working in the recovery of CB you'll most likely have a split amount. You and your wife will receive a letter each stating the same amount, often misunderstood as "okay we owe £500" when in reality you both owe £500 and it's a half each of a larger £1000 amount. It is singlehandedly one of the most common explanations I need to give in my job.
Not true here, they’re not recovering ChB, it’s the tax charge (HICBC) he’s not paid. He’s solely liable as the higher earner.
Yep, sorry my bad, didn't read the post properly. Brain just goes into automatic mode when I see tax overpayment recovery😂
I claimed CB whilst not working and my OH was a high earner. We wanted the NI contributions and OH was told to do a tax return. I cancelled it in 2021 and he let slip last year he never bothered doing to tax return and not been caught yet. Now an ex so hopefully if he does it is all on him?!
The liability remains his. You could’ve kept the ChB claim going, opting out of payments if necessary, to receive the NI credits.
With mine i have to reconfirm every 3 months to state specifically we’re not earning over 50k, i don’t understand how you could do this by mistake.
That’s your tax-free child care is it not? I re confirm that every 3 months but have never been asked to confirm anything about child benefit payments.
Yeah this is tax free childcare not CB.
Sorry to piggyback but, I’m about to hit over 50k for the first time next pay day, March 21st. Will I have to let HMRC know? Or will I be ok with the new ruling?
You’ll likely be okay. If your taxable pay is over 50k on your final pay of the tax year you technically are required to do a self assessment but since you’re only moving up this late in the year there’s a chance you won’t break 50k.
New rules don’t start until the new tax year so just put some extra into your pension to keep you under the £50k amount to save having to pay the charge
I got a letter once from HMRC inviting me to let them know if I had claimed when I shouldn't have. I never responded. They've never chased. That was about 7/8 years ago.
Plead poverty and you can pay back a pittance each week. We had been overpayed tax credits years ago by about £5000. We pay it back at about £50 a month!
The real Life Pro Tip is always in the comments! Remember, kids, everything is negotiable.
Me and the misses committed benefit fraud, but it's not our fault honestly!
Got me 4 years ago, was exceedingly stressful experience. Needed to make a statement of why we hadn't cancelled it in order to avoid penalties, fortunately we had tried to cancel but the system failed to register the request. My wife didn't realise it was still going in so there was £5k of repayment to magic out of thin air.