Ex claimed child benefit incorrectly but I am being pursued for it

[aakk]

I have begun divorce proceedings 6 months ago and since then my ex and I are living in separate addresses.
I informed HMRC of my change of address. We have 2 children in common.
We have the decree nisi but it will take another 6 months to finalise everything.

I just received a letter from HMRC saying that I owe a lot of money for child benefit from FY 2019-20. It appears I also owe for FY 2020-21. During all this time we were living together. I earn over the threshold for child benefit so neither I nor my ex was ever entitled to claim child benefit.

It appears that my ex made a benefit claim 1.5 years ago without my knowledge, 1 year before we separated and began divorce proceedings, and has been receiving benefits ever since. As the higher earner I am now liable to pay back £4000 in benefits which were claimed by somebody else without my knowledge. My ex was fully aware that we were not entitled to the benefit. However the benefits have gone to my ex's account and I have never seen this money. According to HMRC's rules, it is always the higher earner who can be pursued for child benefit.

I have gone online and made sure no benefits are paid any more.
However now I am not sure how to proceed:

1. just pay the money I owe HMRC and say nothing
2. pay the money but make sure it is factored into our consent order
3. tell HMRC that this claim was made without my authorisation or knowledge and my ex was fully aware of it being against the rules.

Does anybody have experience of anything similar? I have searched online and found a fair number of articles about higher earners being hit for child benefit clawbacks that their exes claimed without their knowledge, but I have no idea how it affects a divorce procedure and if it can be shown as evidence of financial misconduct, or even if what my ex did is counted as benefit fraud. I suspect that technically it's not fraud as child benefit can always be claimed no matter what you are earning, but it just has to be returned to HMRC if too much was paid out.

For what it's worth, my ex began an extramarital affair at the time that the child benefit claim was put in and spent a large amount of marital funds on hotels and holidays since then, so I think I have an idea where the money has gone. What I'm not sure is, can this kind of misconduct be factored into the settlement, or does this idea of "need" trump everything else?

Perfectly legal to claim child benefit and then pay it back as a higher earner. In fact, advisable because you can only back-date the child benefit claim a limited period if you lose income, whereas self-assessment will take into account income over the whole tax year when paying back. So if your lose your income partway through a year, you may get to keep the entire years benefit rather than just the latter part.

From what you say, most of this was done whilst you were still living together. I don't think you have a leg to stand on for that, unfortunately?

If any was claimed after you had split up you should hopefully be able to dispute it with HMRC. But in those circumstances your ex ought to be entitled to the benefit.

I can see why you're pissed off if it was done without your knowledge, but I don't think you can do much here if it relates to the period you were living together. Think of it as a reminder you're better off split?

It wasn't against the rules for him to claim it. You won't be liable from when you separated to end March this year.
It's truly crap that he hid it from you

I agree. It wasn’t against the rules to claim in. Infact, as a PP has said, sometimes it’s advisable. Legally he has done nothing wrong and, as you were together at the time, I suspect there is nothing you can do.

There has just been a. Legal ruling that says the HMRC cannot use their "powers of discovery" to try and claim back the money anyway. Have a look. www.google.com/amp/s/www.express.co.uk/finance/personalfinance/1457553/hmrc-child-benefit-appeal-rishi-sunak-charge-budget/amp

It’s not necessarily advisable to claim the money to be paid out - You can process the child benefit so you tick a box to claim the mother’s NI protection without having the hassle of receiving the money just to pay it back through a tax return … clearly not his intention.

I had a similarish situation.

We bad claimed Cb under my ex name always.

Between when we separated and when we did financial disclosure his salary went up significantly unbeknownst to me and above the threshold. He did not do anything about it as he never did any life admin/ paid attention etc. So a debt was due.

In our consent order it was agreed he had to pay that debt as it was his 'fault'

Im not sure if it helps but during a divorce a few years ago there was a tax credits overpayment the man was only held liable for what went into the joint account what went into hers personally was classed as "her" overpayment alone

@PicaK and @PotteringAlong I read this as the OP is male and ex-partner is female.

I don't think it can be classed as benefit fraud. You were technically married and living together at the time. I also don't think you have much of a leg to stand on with HMRC. But I would include it in the divorce settlement as it being your partners debt rather than yours.

You should be aware though that even if you get an agreement off hmrc that the debt isnt yours or is only half yours should your soon to be ex partner not pay they will pursue you again

Best get it put in the consent order and then you can get enforcement if Necessary

How old are you children? Did you never claim before the rule came into life?

Are you saying that CB was never claim, because you were from the threshold from the birth of your eldest and unbeknown to you, they went and claimed it, despite knowing you would incur a debt?

That's a different scenario to the above when CB was claimed, should have been stopped but wasn't and so the debt occured.

Doesn't matter what gender the op is. The person who is primary carer is entitled to claim child benefit. It's one of those weird rules where if you're married/a couple then if either earn over the threshold they alone are liable. I don't agree with it but that's how it is. The person who claimed hasn't legally done anything wrong.

The person who claimed was entitled to
But should have informed the other party so that it was paid back at appropriate time

Try to claim it as part of divorce costs/ settlement
However if your ex is not working or working part time or on a lower salary and is primarry cater then they could end up with more assets

I agree about claiming it back as part of the consent order. Speak to your solicitor about it and have them write a letter to the other side explaining that.

Thank you for all the replies. I understand now it's not any kind of fraud, so I can't really do much. I will ask the solicitor if I can at least put it in the financial settlement. That's really helpful from those who have suggested it.

I know that it was done in bad faith. When our youngest child was born I claimed child benefit for 2 years, until I switched jobs and accidentally went above the threshold. I then had to pay back £2500 at the end of the year, and so after that I stopped claiming the money. That was how we found out about the payback rule, which is I guess how most people find out about it!

My ex knew about this and went behind my back to put in a new application, a few years later, without me knowing. As we lived at the same address at that time, HMRC didn't notify me about a rival claim. But as soon as I changed my address this year, I got a "conflicting claims" letter from HMRC, and that was the first I heard about it, and just now I have got the first letter chasing me for the money.

The other cases that posters have mentioned seemed to involve innocent people being caught out by being promoted at work - this isn't what has happened here, it was clear foul play.

Even if legally it's not fraud, morally I believe it is a form of theft.

I'm also going to be careful what I do as I don't what my ex to know that I've found out yet, I guess I should leave it to the solicitors. There were other instances of financial misconduct (money disappearing) and I am worried I have found the tip of the iceberg. Who knows if my ex claimed universal credit too, or has taken out a dodgy loan? I will also need to find out exactly how much has been claimed by my ex over 3 tax years in order to calculate how much I "owe".