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High income child benefit charge

Ordinary Dad
Posts: 1
Joined: Mon Oct 16, 2017 4:38 pm

High income child benefit charge

Postby Ordinary Dad » Mon Oct 16, 2017 7:15 pm

Not happy at all with my situation.
HMRC have sent me a letter demanding payment of £6k for failing to cancel child benefit and therefore not filing self assessment returns!!!
Up until this letter arrived, I knew nothing of this 'new' legislation.
I am an employee of a large company, not self employed who has worked slowly up to a decent wage, only to be hit with this demand, but also fines for not doing self assessment and a requirement to fill in 2 years worth now.
HMRC have never notified me that I fall into this bracket where I need to do this. I am PAYE so never imagined I would have to do SA.
They expect an ordinary person to know about changes which in all honesty would not have affected me 5 years ago on my minimal wages but now I earn good money, I am apparently a tax expert overnight, completely aware that I am liable and have therefore deliberately avoided paying my dues!
I had understood that child benedit apllied up until they were 16 and am alarmed that none of my peers are aware of this either.
Sorry for the long post, my question is this: How can HMRC get away with this? If any other company didn't let their customers know of changes to terms and conditions, they would be in hot water. What HMRC have done, is let me run into potentially 5 years of debt and then added extra burden in unjustified fines!
I will of course pay back the money. I work hard. I have 2 jobs, the second being emergency services which I pag higher rate on too, another ridiculous rule.
Thanks

Lambs
Posts: 1380
Joined: Wed Aug 06, 2008 3:15 pm

Re: High income child benefit charge

Postby Lambs » Mon Oct 16, 2017 8:16 pm

O,

It may be worth asking how they know now that you are/were liable for the clawback, but were not back when it mattered. Did they actually send you notices to file a tax return for those previous years? Did you receive them? If not, then you MAY be able to appeal the penalty on those grounds. Even if you are an ordinary employee, they will know where you live through the PAYE employee information sent by your employer under Real Time Information. So if they sent paperwork to an old or incorrect address, then you could argue it's inappropriate to charge a penalty, if it was their error that made them late.

Regards,

Lambs

SteLacca
Posts: 278
Joined: Fri Aug 07, 2015 2:17 pm

Re: High income child benefit charge

Postby SteLacca » Wed Oct 18, 2017 1:28 pm

Whilst Lambs' response is perfectly valid, I'll address your other issues:

HMRC as an entity are not getting away with anything. They are applying the terms of the legislation (TMA S.7 1970) requiring an individual to notify chargeability. You'll not from the date that it's a law that's been around for a while.

With regards to the HICBC, this was announced by George Osborne in the budget, was publicised via the Treasury website when the Red Book is published. The speech was on national television, and if I remember correctly, it was fairly heavily reported in the press.

It is a fact that HMRC does, sometimes, expect taxpayers to know intricate details of the law (unreasonably, and something highlighted in a recent Tribunal case), but in this instance, you'd have had to be living under a rock to be completely unaware.

Lambs
Posts: 1380
Joined: Wed Aug 06, 2008 3:15 pm

Re: High income child benefit charge

Postby Lambs » Wed Oct 18, 2017 11:54 pm

S, I disagree. Child Benefit is nothing to do with tax. It is not taxable. It is only deemed to be a tax, for the purposes of recovering it through tax returns where one's adjusted income exceeds the relevant threshold.

Furthermore, it is an abuse of the principles of independent taxation to hold one party liable for another's receipt of income (we do not know if that applies here although it certainly does In many cases). Average Joe is perfectly entitled to wonder how the hell he has to fill in a tax return about something that he never received, and that is nothing at all to do with tax.

We have not yet established whether or not the querist's adjusted income was in fact above the threshold such that (s)he has a "tax" liability to settle. We have not established whether or not querist is in a relationship with the recipient of CB such that it can be clawed back against him/her. (although it could be the querist in receipt). I suspect that HMRC has not bothered itself too much with establishing the facts of whether or not a return is actually necessary either. To be honest, neither have I. Yet.

I think I have raised the point elsewhere before: with all these information powers that HMRC has now acquired, how is it that it can do such a bad job of giving people the reliefs, etc., to which they are entitled? Why do they not use their powers proactively? Why, for instance, under RTI, did they not write to the querist once his monthly salary hit £50k+pa rates, and warn him he might have to consider HICBC?

Apologies for preaching. Of course the duty to make a return does not necessarily depend on having a liability. I just find it annoying that HMRC sets its goals so low.

Regards as always,

Lambs

bd6759
Posts: 2349
Joined: Sat Feb 01, 2014 3:26 pm

Re: High income child benefit charge

Postby bd6759 » Thu Oct 19, 2017 7:42 pm

Lambs wrote:S, I disagree. Child Benefit is nothing to do with tax. It is not taxable. It is only deemed to be a tax, for the purposes of recovering it through tax returns where one's adjusted income exceeds the relevant threshold.

It is a tax

681B High income child benefit charge]
[(1) A person (“P”) is liable to a charge to income tax for a tax year if—

(a) P's adjusted net income for the year exceeds £50,000, and

(b) one or both of conditions A and B are met.

(2) The charge is to be known as a “high income child benefit charge”


SteLacca is correct to the extent that it was widely published when it was introduced. I know that I should not throw bricks through my neighbour's window, but neither the police nor the government have written to me to tell me that. I really couldn't use that as an excuse.

I also think it is clear from the OP that there is a libaility. I don't understand the bit about fines for not filling in a tax return because they can only apply if a notice to file has been given. There is however a s7 obligation to notify if there is a liability to pay the HICBC, so it may the potential penalties for this failure that HMRC have referred to. Not knowing was a reasonable excuse in NRCGT return case for the person living down under. It might not be so reasonable for a person living in the UK.

Apart from that I agree with what you say. But the utopia of MTD will fix everything. :-O

Lambs
Posts: 1380
Joined: Wed Aug 06, 2008 3:15 pm

Re: High income child benefit charge

Postby Lambs » Thu Oct 19, 2017 9:09 pm

B,

You fell into my trap. I said that CB was nothing to do with tax, nor is taxable income. You have confirmed my point that it is only by reason of amending legislation that there is an Income Tax charge to claw it back. Thank you.

Having said that, I should probably limit my arguments to those which do not need to be justified with (or drowned in) caveats.

Oops, I did it again.

Most cordially,

Lambs

O, I fear I may have hijacked your thread for my own nefarious ends. Assuming we have not bamboozled you to death, if there are any points you wish to take further, feel free to ask.

bd6759
Posts: 2349
Joined: Sat Feb 01, 2014 3:26 pm

Re: High income child benefit charge

Postby bd6759 » Thu Oct 19, 2017 9:58 pm

Lambs wrote:You fell into my trap.
No I didn't.

Lambs
Posts: 1380
Joined: Wed Aug 06, 2008 3:15 pm

Re: High income child benefit charge

Postby Lambs » Fri Oct 20, 2017 7:47 am

Yes. Child Benefit is not taxable. CB is not the charge.


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