A (possibly daft) question I have about the new child benefit changes

[trailingvine]

Hi. Not sure if the 'letters' have gone out yet and maybe I will be getting one, to answer my query, but perhaps in the meantime someone can help:

I earn well under the higher rate threshold. I complete a tax return each year for some self-employed earnings and rental income. My husband earns well over the threshold, but not quite enough to have to complete a tax return (isn't that for earnings over £100000). We live at the same address but have no financial links at all (not even a joint mortgage) and don't even have the same surname. No-one 'official' knows we are even married. I am the one who claims child benefit.

Here are my quesions:

How will the Inland Revenue know that I have a partner who earns over the threshold, if he doesn't fill in a tax return but just pays through PAYE? If they don't know, how do they know to write to me?

Are they going to ask to confirm if my partner earns over the threshold? If so, my husband (who is a lawyer, but not in this area) thinks that it might be somehow against the law for me to tell a third party how much he earns.

How are they planning to 'claw back' the money from someone who doesn't fill in a tax return? Are his employers going to have to do something?

Finally, I guess the one that everyone is wondering about- will I lose my entitlement to full state pension if I stop claiming?

I don't plan to stop claiming, I thought I'd just go for a sort of passive resistence. But any answers would be really helpful as I don't really know much about how this sort of thing works.

Thanks

Im a lawyer too and there is no way that your DH should be condoning or being involved in this. Any hint of dishonesty (which this is. You're not confused) and he'll be struck off. Even if he wasn't, his firm are likely to sack him if he's caught and they find out. Believe me, HMRC would LOVE to find a lawyer doing this and make a high profile example of them.

Tell your DH that, according to HMRC, they are content that the law will not be breached due to any disclosure by you of his income. In any event, it won't be you disclosing. It's up to him to fill in the self assessment tax return. If he doesn't want to, you should voluntarily forfeit the benefit.

Putting it simply, HMRC will match up the information. Even without receiving tax returns from your DH they receive the information from his employer each year of his income (the P60 figures). They will match up taxpayers at the same address with the CB records. It might take them a while to do it, but they will get round to it. It would be your DH's responsibility to declare the income and if he doesn't, as a lawyer, that could jeopardise his career. You'll gather I'm saying, don't try this one on! Whether or not I think this is a sensible system at all is another matter.

I am pretty sure the state pension issue has gone away and it's OK. I am waiting for my letter as it may have some more details in it.

You live in the same house so his PAYE address and your child benefit address are the same. It is income in a household doesn't matter whether you are married or not. They will link it up it may take a few years.

Don't stop claiming as you could lose your entitlement to state pension.

If your husband is employed it'll be done through his P60 - you have to let them know you're married but not your partner's earnings as they shoudl do that through the P60

HTH

No 'lawyer' would think it may be against the law for you to tell someone else how much he earns.

My understanding is that, even if you stop claiming, tiu should still receive the national insurance credits so state pension issues won't arise. Yiu could check with HMRC though.

Are you saying that you and your "lawyer" dh are currently committing fraud? Have I got that right?

I think, and I should be wrong, but they are going to start making those earning over 50k to fill in a self assessment form. On that they'll have to declare if anyone is claiming cb in the household and then get back the benefit you've received that way.

YABU, very unreasonable and possibly breaking the law as well.
Pack of biscuit time.....

WEird isn't it that for some things being married/living together counts, ie losing CB, but no tax break!! Fucking crap.

You are now required to complete a tax return if you earn £50k or more and are the highest earner in a household where someone claims CB. This is stated on the HMRC website. They will catch up with your DH.

Hello

This isn't really an AIBU so we've moved it to Money Matters.

I'm not going to comment on the undeclared marriage generally, but to answer the specific questions:

How will the Inland Revenue know that I have a partner who earns over the threshold, if he doesn't fill in a tax return but just pays through PAYE?

From the address provided by his employer on their annual PAYE return, and from other records they may have.

If they don't know, how do they know to write to me?

They won't write to you, they will write to him.

Are they going to ask to confirm if my partner earns over the threshold? If so, my husband (who is a lawyer, but not in this area) thinks that it might be somehow against the law for me to tell a third party how much he earns.

Not relevant as they will write to him.

How are they planning to 'claw back' the money from someone who doesn't fill in a tax return? Are his employers going to have to do something?

He will be asked to fill in a tax return.

Finally, I guess the one that everyone is wondering about- will I lose my entitlement to full state pension if I stop claiming?

HMRC have said that the system and forms will be changed so that you can still be treated as eligible for CB without actually receiving it, but I haven't seen anything yet that convinces me enough to advise anyone to disclaim CB instead of waiting for it to be clawed back.

I don't really know much about how this sort of thing works.

There isn't really any "sort of thing" like this - clawback through Self Assessment has not been tried in the UK before.

If he doesn't want to, you should voluntarily forfeit the benefit.

There is no reason for the OP to do this. The legislation applies only to people with income over £50,000 NOT their partners.

MrA can I ask, if in this situation the OP's husband didn't complete the self assessment would he be in bother with tax people, benefit people or somewhere else? Or would the OP be the one in trouble?

Rockchick - as MrA does not seem to be around: if he doesn't complete the return when he has been sent one then he is in trouble with the tax people. There are penalties for late filing and additional penalties for incorrect returns (just in case the high earner thinks that HMRC won't know about the child benefit their partner is getting and therefore won't report it on the return).

riksi - exactly.

mra - I don't understand your point re my last post. The whole issue here is that the tax position is considered per couple. Li k here makes that clear
[http://www.managers.org.uk/news/hmrc-offers-child-benefit-change-reminder link]. If the OP's husband dies not want to complete a tax return to deal with the repayment of the cb, the other option is for them (as a couple with one of them earning above the threshold) to waive the benefit

Thankyou Riksti I just wasn't sure exactly who would be in bother about it :)

Thanks riksti, what you say is correct

@shinyblackgrape re. "The whole issue here is that the tax position is considered per couple."

It absolutely is not. Look at the legislation (Schedule 1 Finance Act 2012), "A person (?P?) is liable to a charge to income tax for a tax year if...". Nothing about a couple being liable to a charge. The fact that a person is not liable to a charge if his or her partner disclaims the CB does not place any obligation on that partner to do anything.