Have you had to pay a fine relating to the high income child benefit tax charge? Tell an MP about your experiences

[RowanMumsnet]

Hello

Parliament's Engagement Team has been in touch and would like us to pass on the following - so if you've got any thoughts you'd like to feed back to this MP, please add them to this thread.

Thanks
MNHQ

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"Failing to register your liability to the high income child benefit charge through a tax return can result in a fine."

"On 3 September, Conservative MP for South Thanet Craig Mackinlay is leading a debate in Westminster Hall on the issue, and wants to hear about your experiences. He gave us the following statement: “I share the concerns of those residents in South Thanet who have received financial penalties for failing to register their liability to the High Income Child Benefit Charge, who have previously, as routine PAYE taxpayers, had no need to complete a tortuous tax return. I want to shine a light on this complex area of interaction between tax and benefit rules and these unjust fines.”

“Have you received a fine after failing to register your liability to the High Income Child Benefit Charge through a tax return? Did you feel the penalty was justified?”

"We will pass on your comments and experiences to Craig Mackinlay who will use them to inform his speech. He may quote you directly during the debate. Links to watch the debate and read the transcript will be posted when they become available."

Weve not been fined because this is our first year claiming it. However as we're both PAYE taxpayers it seems unnecessary. It's an easy way to catch people out or make it to difficult for parents to claim. They ever save money by less people claiming or make money by fining people. If they can work out PAYE tax it seems daft they can't sort this automatically.
I'm almost tempted to not claim or reduce my hours so I'm under the threshold. As a working parent it's another thing to think about that I don't really have the energy for and they'll be loads of people caught out.

We haven't been fined but find the system so confusing. I can see how easy it would be to make a mistake, to not be able to complete the process and then receive a fine.

The online system is so hard to understand, it is not user friendly at all. The wording is terrible, it needs to be more straightforward and clear.

Given that paye is now processed real time it doesn't seem to make sense that a declaration is required, as HMRC have the payroll information anyway.

But that doesn't work if one person is claiming it - the higher earner has to pay the fine not necessarily the claimant

I forgot to add that when I submitted the tax return last year, i selected the option to pay the charge via paye (ie change my tax code and pay a bit every month). I received a letter to confirm this. Yet for some reason we were sent reminders and had to call HMRC as this wasnt recorded in the system? So theres another way innocent people can get fined.

The more I think about it, the more the whole system makes my blood boil.

Never been fined as we jump through hoops as regards CB.My dh’s bonus has to pay our tax bill every year to pay back the CB I have to claim in order to keep future benefits as I understand.

It is ridiculous. Even if we weren’t married he’d have to do this. He works hard to get a bonus which brings him just over and causes us to be penalised.. There is literally no point in him doing extra hours or working hard. It’s a ridiculous scheme.

Yet means testing TV licenses would apparently be too complicated.

We did claim it whilst I wasn’t working, as I was advised to for NI credits, and have been forced to pay it back due to DH earning £60k, which was our total household income at the time.

It is particularly galling and frankly unfair that a household where both parents earn £49k, ie £98k total household income, can continue to claim whilst we are being punished.

I am now working in a low paid role (15k) and all of my colleagues seem to be able to claim all sorts of in-work benefits as well as child benefit, it is simply unfair and does make me resentful. What is the point of working hard to get a well-paid job whilst everyone else gets their incomes topped up by the government? Why are my children not entitled to anything whilst wealthier households than ours are bunging free money in ISAs?

You had no childcare costs, the family with two working parents may well have. Childcare is an awful lot more expensive than child benefit!

Many dual income families are claiming CB with zero childcare costs for many years.The expensive childcare bills are pre school age.2 salaries also comes with 2 personal tax allowances instead of one. However you dress it up it’s ludicrous and unfair.

I really hope that no one has actually claimed it just to get the NI credits. Because you don’t need to. There’s a section on the application form where you can apply but elect to not receive any payments. That way you get the credits but don’t have to file a return.

If you’re near the cusp and get overtime or bonuses it’s easier to claim.

My dh earns between £48k and £61k therefore we claim and some years have to pay back whilst others we don't. He finds it so galling that by working overtime and 6/7 days per week we lose child benefit. I understand he is on an above average salary, however I only earn £19k for full time work so a couple earning £20k more than us split equally as £49k each will still receive child benefit.

We have been hit with charges as we had wrongly assumed that it was clawed back through his tax code. It took 4 years for HMRC to let us know though, by which time our fines and money owed were huge and we had to put it on a credit card. Surely this should have been caught in half that time. We are still trying to pay the credit card off and have recently sold my dhs car to try and clear it. We are definitely not the only family in this same position.

We haven't been fined, but wouldn't have known it needed doing had I not seen a post a friend shared on Facebook. My partner's salary only increased to warrant it this tax year. We'd have been completely clueless had I not as it seems it isn't publicised that you need to complete one.

The only info we got was off Mumsnet, can guarantee we’d have been fined if not.

...and this is another reason why I don’t think I’ll be bothering claiming child benefit.
Completing my own tax return due to a rental property (my pension) is difficult, confusing and enough hassle without having to factor in paying back almost the exact same money we’ll get from child benefit because DP is in the higher tax bracket.

Yes. 4 years worth. I accept it is in part my fault, but having always been PAYE I didn’t realise the onus was on me...I assumed HMRC would work this out based on how much I was earning. So I’ve had to pay back over £4K...within 3 months, not even allowed to pay it back via my tax code.
The whole system is ridiculously complex. Trying to get in touch with anyone is almost impossible. I think based on my salary I’m still entitled to a bit of it, but to be honest, it’s easier not to bother. I’ve told HMRC I’m not claiming CB anymore.
Whilst I appreciate I am in the fortunate position of earning enough to be subject to the CBHIC, I am also a single parent and it is extraordinarily unfair that a couple could benefit from two incomes and still claim it, but because mine on its own is over the £50k threshold I lose it all.

Yes, I was fined and found it unfair.

Our situation was that when it was introduced, my DH was the higher earner. I continued to claim the CB and he included it on his tax return.

A couple of years passed and gradually my income exceeded DH's. Initially because of (non contractual) bonuses so it was hard to know who would be the higher earner. However, given we thought, as a family we were correct, we never thought to adjust it.

What made matters worse was that it transpired that my husband's adjustment had stopped somehow so we had been wrongly claiming and not adjusting via tax. Obviously I was happy to repay the amount we wrongly received due to this. However, I also had to pay back the CB I received that DH included on his tax return. He got a tax rebate. The interest and fine I had to pay meant the amount didn't match.

We never got to the bottom of why DH's adjustment ceased.

I was pretty cross about various points including that the adjustment ceased without us knowing, that the system worked poorly where salaries are similar and where bonuses lead to variation, that we were fined simply because the wrong person included it on their tax return, even though overall we were ok.

I ended up cancelling receiving the CB altogether, which with hindsight I should have done to start with but chose not to in case one or both of us dropped income in future.

All in all, a bit of a costly mess for me.

Happy to provide further details if helpful and if I can!

(we're both PAYE btw, no complications!)

What @ArfArfBarf said. I just ticked the box on the form when I applied to say I didn't want to receive it. Simpler all round. For what it's worth, I've always found the CB office very helpful. Had to get a letter off them when I applied for DS school place. They were friendly, efficient and spoke in plain English. I know that's not the question being asked but thought I'd add my tuppence worth.

Yes, have been fined. We realised our error in 2017 and submitted tax returns for 2016 & 2017. It turned out we weren't liable to pay any back for 2016 but can I get the fine back? Nope!
I only found out from a friend that we had to register for Self Assessment, as PAYE-ers it hadn't been made clear to us that we needed to do anything.
The system is also quite unfair. Lazy administration I suppose. 2 households with £99k income could be made up of a £75k and a £24k income and be ineligible but 2 parents earning £44k and £45k are entitled to full child benefit.Nuts!

You had no childcare costs, the family with two working parents may well have. Childcare is an awful lot more expensive than child benefit!

God this annoys me. I am above threshold and dont have a partner at home, I spend a fortune on childcare and did so for years as a single parent. I'm allowed to be pissed off that I am penalised, when a couple earning the same as me combined receive CB.

Why do people trot out this stupid argument every time CB is discussed!

We have ended up not registering for it or claiming at all but I don't know if there are implications in this? DH earns over 60k I don't earn anywhere close as I work part time now. It is completely unfair and I'm very resentful about it. We have no family nearby and paid huge childcare costs - part of the reason I went part time. I spent years as a childless single woman subsidising other people's child benefit. I understand capping it at two children but it should be universal like state pension. We do not receive any benefits. Like others I feel the injustice of a household earning more than us receiving it because their salaries are evenly distributed.

Watching this with interest, not had a fine but my pay just tipped over the threshold this year and could potentially to 60k with bonuses. I was advised easiest option was to just cancel child benefit which I did. Feel very ill informed though and I'm curious to know if there are any implications in cancelling it?

It is a pain completing a tax return. To the extent that I tried to unclaim child benefit, only to be told it would cause issues with my children’s national insurance if I didn’t claim it. So now I’m faffing about with a return every year for something I don’t want but which I can’t not take.

We haven’t been fined and for a few years made sure we stayed under the limits through AVCs, childcare vouchers we had no immediate use for (we have now) and ‘bought’ annual leave. It was too complicated to go over and I was resentful of the marginal tax rates (or lack of benefit rate). As our income has increased I’ve given up - of course, the thresholds haven’t risen in line with inflation. I’m not expecting any violins to be played for us but the loss of CB under this system is not simple, fair or equitable. Holiday clubs are not cheap and every pound is welcome! George Osborne didn’t half mess things up.