Child Benefit tax return

[mikyccity]

Hi,

I have recently found that we are not eligible to have child benefit because of my high earning. I rang child benefit department two weeks ago and stopped child benefits.

Child benefits are paid to my wife but i am the only earner in my family. Who supposed to file a tax return, is it me or my wife?

Also, would we get tax penalty on returning child benefits we owe to HRMC? My pay went up in Jan 2017.

Edited by mikyccity on Saturday 23 February 19:51

[littlebasher]

it'll be you that needs to complete the tax return - Fairly easy these days, takes longer to organise a logon than it does to fill it in.


I thought the deadline was the end of Jan, best to speak to HMRC and see what they say about it

[PurpleTurtle]

All the joy of this ridiculous policy is here

https://www.gov.uk/child-benefit-tax-charge

Two people in a couple supporting one kid can earn £49,999 each and keep all their child benefit. One person earning £60,000 supporting five kids has to pay it all back.

Massive inequity and no proper thought to the policy.

Whilst I appreciate these are high salaries to many, they don’t go far in London, people are by no means ‘rich’ on them.

[PurpleTurtle]

Also be careful about ‘stopping’ child benefit. If your wife isn’t claiming it, you are losing out on NI credits which will detrimentally affect her state pension,

Totally ridiculous system.

https://www.theguardian.com/money/2018/jul/28/bewa...

[mikyccity]

PurpleTurtle said:

Also be careful about ‘stopping’ child benefit. If your wife isn’t claiming it, you are losing out on NI credits which will detrimentally affect her state pension,

Totally ridiculous system.

https://www.theguardian.com/money/2018/jul/28/bewa...

I didn't know about this.

May be worth getting child benefits and then return it at the end of the year.

[JapanRed]

PurpleTurtle said:

Also be careful about ‘stopping’ child benefit. If your wife isn’t claiming it, you are losing out on NI credits which will detrimentally affect her state pension,

Totally ridiculous system.

https://www.theguardian.com/money/2018/jul/28/bewa...

This. Read Money Saving Expert Martin Lewis’ site for more info.

You may lose out to the tune of thousands of pounds if you stop the credits. Me and my wife both earn over £60k but still receive the credits. Just pay them back at end of the year

[mikyccity]

JapanRed said:

This. Read Money Saving Expert Martin Lewis’ site for more info.

You may lose out to the tune of thousands of pounds if you stop the credits. Me and my wife both earn over £60k but still receive the credits. Just pay them back at end of the year

Can i ring them and start getting benefit again ? or its too late as its already been stopped.

[996Type]

Based on your gross salary, you also have an option to offload money into a private pension so that you reduce this figure to less than £50K.

It might be painful but you would get to keep the CB and also claim tax relief of 40% on the pension contribution.

[mike9009]

I earn just in excess of £60k. We have two kids and claim child benefit. my wife earns about 12k per annum.


We manage this by paying a load of cash into my pension, which then reduces our liability somewhat.


The system is ill though out. We have friends who earn in excess of £90k and get all their child benefit with none of the faffing that we have to do. (I suspect my pension looks better, but our monthly take home is substantially less.)

[mikyccity]

I am just worry about penalty charges.

[supersport]

The other problem that although there was a lot of noise at the time the policy was introduced there hasn’t since. So that people who have been dragged or recently moved into this bracket have no idea.

It thought there was a move to be more understanding of these people rather than just fining them. Could be completely wrong though

[mikyccity]

supersport said:

The other problem that although there was a lot of noise at the time the policy was introduced there hasn’t since. So that people who have been dragged or recently moved into this bracket have no idea.

It thought there was a move to be more understanding of these people rather than just fining them. Could be completely wrong though

This came out in Nov 2018 https://www.ft.com/content/719d40ce-dddd-11e8-9f04...

[theboss]

When you claim CB you can elect to have your eligibility recorded but not to actually receive the money - therefore you get the state pension / NI credit but without the hassle of receiving the payments then paying them back via the tax charge later.

Pension contributions are the best way to deal with this if you can spare the cash.

[mikyccity]

theboss said:

When you claim CB you can elect to have your eligibility recorded but not to actually receive the money - therefore you get the state pension / NI credit but without the hassle of receiving the payments then paying them back via the tax charge later.

Pension contributions are the best way to deal with this if you can spare the cash.

This is interesting.

[mikyccity]

I do have another question here, Does HRMC send letters to everyone asking if there are effected by tax charge? I never got any letter.

[BenjiS]

mikyccity said:

theboss said:

When you claim CB you can elect to have your eligibility recorded but not to actually receive the money - therefore you get the state pension / NI credit but without the hassle of receiving the payments then paying them back via the tax charge later.

This is interesting.

This is what we’ve always done since the eligibility rules changed. There’s an option in the website for you to select it.

Checking my wife’s NI account shows she has full contributions despite not working since we had kids. And I’ve never needed to do a tax return.

[mikyccity]

I will call CB department and inquire about it.

I am really hoping i won't get penalty and i am happy to return what i owe in one go.

[Eric Mc]

mikyccity said:

I will call CB department and inquire about it.

I am really hoping i won't get penalty and i am happy to return what i owe in one go.

To escape the late filing penalty for self assessment, you must have a "Reasonable Excuse". So far, not knowing the law as it relates to your own circumstances has never been accepted as a "Reasonable Excuse" by HMRC.

[JapanRed]

mikyccity said:

JapanRed said:

This. Read Money Saving Expert Martin Lewis’ site for more info.

You may lose out to the tune of thousands of pounds if you stop the credits. Me and my wife both earn over £60k but still receive the credits. Just pay them back at end of the year

Can i ring them and start getting benefit again ? or its too late as its already been stopped.

Yes just ring them and get the payments started again. We cancelled without realising and then phoned and got them restarted again. Missed out on about 3 weeks of NI contributions which is nothing over 40* years.

[C0ffin D0dger]

You can elect to not receive the payments anymore but still get the NI credits so long as you claimed for it in the first place.

Makes your tax a lot simpler as no returns to do provided everything else you're liable for gets sorted by PAYE. It's what I do as I've now hit the threshold of not getting any child benefit even after pension contributions. My missus doesn't work so I count myself in the shafted by HM Government category.

https://www.gov.uk/child-benefit-tax-charge