Child benefit tax

[What0nEarthIsThis]

Hi,

I just read in the financial times that parents whose spouses earn >£60k a year have to file a tax return every year to pay back all their child benefit. The article says that that rule has been in place for about 10 years and if we did not do it then we have to still pay it back now, but we also have to pay the interest on the money.

It says if we give up having child benefit entirely then we won't get state pension credits for the time we are at home with kids.

I'm staggered. I had no idea about that.

I'm a SAHM and I have no income of my own. I don't file a tax return and don't know about tax rules. I never looked into them because I have no income to pay tax on.

I'm also properly cheesed off because life is so hard with the underfunding of the schools and the medical services, and now this comes along to add insult to injury.

I wondered if anybody else knew? And what do you think about it?

The article is called "Why Jeremy Hunt’s parent tax rate is proving controversial" but it's behind a paywall so I can't share it.

https://www.ft.com/content/08f678d7-1ac2-4f9d-86c9-3da040ca4107

Thanks!

No it is benefit fraud. You can only claim child benefit if you are responsible for bringing up the child. So a grandparent could claim if the parents aren't on the scene but they cant claim just because they do school runs and babysit them etc.

I’ve just had to do a tax return and now I have to pay back about £1.2 k

the threshold needs raising as we are barely surviving. Mainly because DH is currently unemployed.

i have colleagues and their partners that each earn just under the threshold and are comfortable. They still get child benefit.

How do you not know about this? It's hardly new

Are you sure that's the child benefit itself?

No.

But there is an election coming up, so get ready for dozens of threads like this.

I dont think it is benefit fraud tbh
Eligibility criteria:

Only one person can get Child Benefit for a child.

You normally qualify for Child Benefit if you’re responsible for a child under 16 and you live in the UK.

You’ll usually be responsible for a child if either:

• you live with them
• you’re paying at least the same amount as Child Benefit (or the equivalent in kind) towards looking after them - for example on food, clothes or pocket money

You'd think everyone would know but if there is someone else out there who doesn't it's good that they might see this thread

For all those doing it for pension contribtions, you can claim it at a nil rate. Ie you get the pension credit but you don’t get the child benefit so there is nothing to repay. In our area they want to see child benefit as proof of parental responsibility for primary school application which means everyone has to claim it at the nil rate if they are higher earners so they have something to use for school applications.

I continued to claim it when the rules changed because I figured it would be less hassle than reinstating if I went back to part time. I make sure I save it so it’s there ready to pay back, so I get a little interest too.

If I was a SAHP I’d definitely take it. It was originally universal so that the mother always had some money even if her husband drank it all away (or whatever).

It’s annoying the threshold hasn’t changed in 10 years. £50k in 2013 money would be £72k now.

Also surprised you didn’t know about this. Maybe those who were parents at the time of the change are more likely to be aware.

I apologise I stand corrected. Thats a very wishy washy criteria. How on earth do they check that someone's relative has spent over the child benefit amount on the kids?

Just because you are a sahm, doesn't mean you can't read the news - it's been like this for 10 years. It's adjusted income after pension is taken out, and that needs to be over £60k to get nothing but the sahp can elect to receive the child benefit but the other parents tax code will be altered to allow for that. They just need to complete an annual tax return which most higher rate tax payers will be doing anyway if they may any charitable donations each year. Its not onerous

It’s one of the reasons I got divorced.

I’d told him several times he’d need to file a tax return. He’d ignored me because it didn’t suit him to listen, and like people have said it sounds ridiculously complicated.

He eventually got a letter telling him to pay it back and he lost his shit at me because I’d spent it.

Anothet nail in the coffin of our marriage. Had they just sent the letter in the first place it might have been less shit all round.

(worked out for the best I suppose, it was the tip of the iceberg)

Yes this is common knowledge - or so I thought. It was all over the press when it started and often discussed on here. I’ve had to repay 2yrs worth, I owe them 1k at the moment. It is frustrating when 2 people on 49k don’t have repay it.

Sorry I just found out that my husband has been paying the tax back all these years on his tax return. I had no idea.

Even my son knows because he helps fill in the form. Apparently I have been living in total ignorance for the last decade.

Live 'n' learn.

Thank you for this! She definitely does spend more than CB on them (and it can be proved by standing orders etc) as well as all the benefits in kind.

Receipts?

Yes this is common knowledge. Child benefit has been based on income for a long time.

But even if you are not entitled to the payments, you should still submit an application for it, but tick the option that you do not want the money, to ensure you get the national insurance credits, which is what you need for the state pension.

Well yes they could but due to the fact both HMRC and the DWP are woefully underfunded and overstretched even if they could check by asking for receipts they never will so this is very open to abuse.

Ha ha, well that’s good news at least. And you’ve opened a can of worms with this thread in the meantime.

@ShakespearesMonkeys

Thanks for seeing my post and responding.

Sorry, yes I so seem to have opened a can of worms. I'm learning a lot about tax from reading it.

Life is very complicated these days. I think maybe it could be a bit simpler.

I don’t think it is a problem her claiming it but I think your husband still should be repaying it via his tax return.

I'm really shocked about this too! Surely this isn't allowed else every higher earner would do this? So you're a higher earning family, lucky enough to be a SAHM, with supportive grandparents next door who could seemingly have the kids if you did need to work, and you're still taking taxpayer benefits?!

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

Yes I knew. I crossed the £60k mark last year with an extraordinary bonus and had to pay £1130 tax back in January.

I keep claiming it because if I don't get the bonus this year or am made redundant during the year, I bet if I put in a claim same day, they won't be so keen to reinstate the claim immediately.

That's funny. But at least you haven't been inadvertently committing fraud and don't have to repay anything. If he's happy to carry on doing that (it's a trivial job if he's doing a tax return anyway) then you might as well continue claiming. Nice to hear a happy ending.

If you did want to stop claiming then there is a box you can tick that preserves your SAHM pension contributions while disclaiming the actual cash.