To ask how many of you know about the Child Benefit Charge?

[Ballstothisdotcom]

I had to repay over £6k a couple of years ago. Had to get out a loan to do it. The children were mine and not my husbands and I had always claimed as a single parent so just didn’t stop.

Have just read daily mail sad face story about this happening to another family.

My sister and her husband have always claimed it. They have never had it questioned. I just wonder if HMRC are blanket mail sending and hoping people will be honest.

I genuinely had no idea about it until we got the letter. It also seems grossly unfair that two people can earn £49999 per year but if one person goes over it you have to repay it. In our case it was my husband who went over the threshold just slightly so we had to pay back from the day we moved in together.

Any one else?

@Racheyg

Yep.

There’s a calculator on the hmrc website. But yes. You CAN claim it. But you do have to pay it back. Like a no interest loan. But we’ve never bothered.

It was very well publicised. We knew about it and stopped claiming

Wow @JasperRising thanks for the info this has really opened my eyes.

I'll get him to get a self assessment form.

Can I just add that we are by no means stupid, silly or claim it unnecessarily. When I had ds1 7 years ago me and dh earned under 25,000 each

What if the non-resident parent claims it but the resident parent is earning over the threshold? Who is responsible for paying back?

I've seen posts in money matters in the past year from ppl who didn't know so it is def not just the op.

There does often also seem to be a lack of awareness that for higher earners or over 60k 'claiming' CB is not the same as 'receiving' CB. You can 'claim' it - thus ensuring a sahp gets NI credits and child is in system - but opt not to 'receive' it - thus avoiding the faff of self assessment and full repayment.

Mintjulia do you still have to fill in a self assessment and/or notify them if your earnings go over £50k but your pension contributions take you back under? Dp has recent had a pay rise taking him over the £50k, he has been told that he won't have to return any because of his pension but he hasn't filled in a self assessment.

poshme, I have had absolutely no letters aside from the initial ones setting up child benefit for each child. I never get an annual letter or any communication at all?

We claim and pay back. It's a chew on. Many families where both are high earners can afford to plough enough money into pensions that they still qualify for CB. A win win situation for them. We can't.

Just to say, for anyone reading this thread and panicking, the charge kicks in for taxable income over £50,000. So that’s gross income minus pension contributions and any charitable giving (ie gift aided giving). My DH earns around £52k but once you minus his pre-tax pension contributions and charitable giving it falls below £50k and we don’t have to pay the charge. MSE is helpful - www.moneysavingexpert.com/family/child-benefit/#avoid

Racheyg not stupid at all. I can easily see that if you first claimed CB years ago when you weren't close to the boundary, you might forget the finer details. And if you have only ever been payee, you wouldn't need to know about self assessment and it's deadlines.

(The deadline for a 2019/20 tax return is actually 31 Jan 2021 but it is far less stressful to sort it early. Especially as you will have to register and wait like 10days for your self assessment ID plus register for an online account and wait for login details to be posted. So start now and then you won't be on hold to HMRC in a panic with 2 days to go next January!)

I think the unfairness of it is a wider point that has grated with me ever since Osborne introduced it:

(I've been a bit rough with my figures here to illustrate the point).

BEFORE

Person A earns £60,000, has two children, gets £2,000 in CB to support the cost of raising children.

Person B earns £60,000 has no children.

Osborne: "we're all in this together and those who earn the most should be expected to bear the greater burden" (that's not a direct quote but I think it was the general gist at the time).

AFTER

Person A loses the £2000 but still has to support their children.

Person B not affected.

ALTERNATIVE

Raise higher tax rate to 42p. (I think I worked out at the time that this would raise a similar amount for the Chancellor as the HIBC).

Person A pays an extra £300 in tax, but still gets £2000 to support the cost of raising children.

Person B pays an extra £300 in tax.

(And very high earners pay more tax rather than a flat charge based on how many children you have).

But much easier for Tories to clobber "high-earning parents who shouldn't be claiming benefits" than do the progressive thing of raising a tax rate.

I am amazed people are unaware of this. It was heavily publicised at the time and talked about on social media. There are still groups like "Mothers At Home Matter Too" which are campaigning for change, as it's grossly unfair.

I think one of the most scandalous things, though, is the fact that people (mostly women) aren't bothering to claim it because their partners are earning too much, but are penalising themselves : if you don't work you won't get a National Insurance stamp unless you are claiming CB.....this will affect your state pension.

We decided to claim it and pay it back through DH's self assessment. It's a pain in the bum, but I wasn't going to lose my NI stamps, thank you very much. As it happens, some years we have paid it all back, others, none, and anywhere in between, due to factors such as bonuses and charitable giving.....so it was definitely worth claiming.

You can claim but not get the money and still get the NI credits

It had loads of publicity when it was introduced, so I think most people must know about it. It's unfair in a lot of ways, but the rules are similar to other benefits.

There are lots of ways around it though - paying into a pension, childcare vouchers, living separately, having another family member claim it (I know someone whose 18 year old dd is claiming it for their sister).

Yes i knew about this so didn’t claim. I think what isn’t publicised is that anyone that is a sahp won’t get there NI stamps paid towards their state pension. This will mostly affect women, i’m glad I was working and paying my NI otherwise I would never have paid in all those years.

We’ve just got a letter saying we owe some back from 2018/19. DH went from just under £50k to £60 in September 2018 so I just went online and stopped the claim just before he started his new job.

Because over the course of the tax year he earned slightly over £50k, we have to pay some back. DH has to do the self assessment to confirm and then they will send a bill apparently, but he reckons it’s going to be less than £100 we have to pay back.

Seems a bit mad that up until the point we stopped claiming we were entitled but still have to pay some of that back, but I get why they do it over tax years.

If they try and fine me they can fuck off!

Yes I knew. But I earn (now and probably always will) earn under the limit. My husband is self employed and has an accountant who does his tax. I think some years we pay a bit back and some years nothing depending on how business is. It's worth it to keep claiming for us because we don't always know until the end of the tax year if anything will be due back.

@Gin96 you make a claim for NI credits only and ask for payments not to be made. This protects SAHM without there being a liability to pay back

I knew about it at the time it happened and am still cross at the unfairness of the rules. We claim it all and then repay it all each January.

I also think it is really unfair that higher rate tax payers can't claim married couple's tax allowance either.
Everything is stacked against families with a stay at home or part time parent and one higher earner.

The high earner does not even have to earn 50k as a salary to lose child benefit as things like bonuses are taken into account as well. So if you earn 50k and receive a bonus of 10k you pay 40% tax on the bonus and pay back your child benefit too which could mean that you actually are no better off with a 10k bonus than you would have been if you'd earned the 50k with no bonus but not lost child benefit.

@NothingIsWrong yes I know that now 😊 only through mumsnet. Luckily I have been working anyway or I would have lost out on 6 years payments.

It was well publicised and it’s very clear online.

I disagree with the new rules, it shouldn’t be means tested. It should either be for all or none to make it fair on the children. Imagine how much could go to schools if it had been scrapped for all and the difference it could make for children.

Dion just to add to your post, taxable income (gross in your post) includes rent, benefits in kind (like the taxable value of a company car) in your P11d not just straight income from a job

Always claim. Even if you don’t get any money it pays your NI contributions.

If you don’t claim child benefit you woun’t be eligible for a state pension if you don’t pay through paid employment.

SAHM’s especially need to claim.

Yes we knew about it when it came in. It was publicised at the time. We still claim it as it means I get NI credits till my youngest is 12. We then pay back the money, if he has gone over the threshold in a year, when my husband completes his tax return. Most people in the higher tax bracket would usually complete a tax return due to pensions tax relief I would have thought. Think it asks about child benefit received when completing it.

So if you earn 50k and receive a bonus of 10k you pay 40% tax on the bonus and pay back your child benefit too which could mean that you actually are no better off with a 10k bonus than you would have been if you'd earned the 50k with no bonus but not lost child benefit.

@chocolatviennois - only if you have 8 children under age 18.