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Original poster

Child Benefit - penalty?

39 replies

whatanotherpalava · 10/02/2021 17:58

Been getting this since 2013 even although Dh is higher earner. Accountant told us to keep claiming as I was unemployed when new law introduced on basis that it would protect NI for me.

Just realised recently realised that Dh hadn't been declaring on his returns (handled by same accountant) although benefit came to me.

I'm guessing that we will have to re pay CB since 2013 plus penalties?

OP posts:
dementedpixie · 10/02/2021 18:12

Probably.

He should have been declaring it on his tax returns and then paying some or all of it back depending on his earnings. Between £50 and £60k you pay a proportion back and then once you get to £60k you pay it all back.

There is the option of claiming and then opting out of payment and that also protects your NI credits but you don't have to pay any money back as you didn't receive any

HotCupOfNo · 10/02/2021 18:17

We claimed and ticked the option of not receiving the funds. I don't work.

I would imagine you will have to pay it back, could you phone and speak to them?

YonderTweek · 10/02/2021 19:40

We had the same last year. We claimed when our child was born and the money went straight into my bank account. Some years later my husband got a pay rise and we didn't think to report it because stupidly it wasn't on our radar. I was definitely one of those people who had no idea you weren't allowed to go over a certain wage, and I'd never seen it on the news either. Blush I panicked and rang them and weirdly I was able to stop the payments quite easily, but starting the process of getting it sorted was a faff because there was no way of contacting the HMRC because they were running a limited service due to Covid. At least I emailed them as soon as I realised what was going on so I had a paper trail proving that I started to sort it as soon as possible.

Haha. We were a nervous wreck but in the end we just printed out a couple of years worth of tax return forms, filled them out and sent them off with deep apologies and an explanation. We were fully expecting a ridiculous penalty, but actually we just paid back what we owed and it was pretty much covered already as my husband had paid too much tax for a few years without realising.

Definitely ring or write to them sooner rather than later. Good luck!

WaterBottle123 · 10/02/2021 19:45

So hang on, the accountant has been submitting returns but not declaring?

Then he's failed in his professional duty and needs to sort it! This is different to not doing tax returns and paying late penalties

WaterBottle123 · 10/02/2021 19:46

The accountant should have asked your husband

Yellow85 · 10/02/2021 19:48

I think it’s 1% of CB for every £100 over £50k. If you earn over 60k you have to pay it all. I got stung for 2019/20 as I got an unexpected bonus and hadn’t been registered for a self assessment. I’ve cancelled it all now...the extra admin 👎 HMRC have also failed to pick it up which they should do given RTI now, so you might get away without penalties and agree repayment

user1487194234 · 10/02/2021 19:52

Standard question asked by CA when they are doing your Tax return
Have you received any Government benefits including Child benefit
Get your accountant to sort it out

Toorapid · 10/02/2021 19:58

My boss had to repay several years' worth but she played dumb and said it was a genuine error (it was) and she didn't have to pay any penalty. However, she has a straightforward PAYE situation and didn't compete a tax return. I'm not sure what happens if he's been competing tax returns that do have a child benefit section and specifically ask the question.

Original poster
whatanotherpalava · 10/02/2021 20:40

Over £60k so definitely shouldn't be getting any of it. The thing is that accountant knew about CB because we had the conversation in 2013 about whether we should keep claiming after the new rules were in effect and he advised about keeping it.

When I started working in 2014 and did my returns via the accountant I never concerned myself with Dh's returns which were also handled by the accountant. I gather that being the higher earner that CB should have been declared on his returns.

I'm presuming therefore that I should let the accountant deal with it?

Apart from re paying CB sums paid to me does anyone know what the penalties are? Eg, are they a fixed amount per year? Obviously crapping myself that the sums could be hefty 😱

OP posts:
dementedpixie · 10/02/2021 20:41

I kept our claim but opted out of payment as dh earned over £60k. This protects NI credits too

Yellow85 · 10/02/2021 20:45

I’m sure HMRC admitted the communication around all this was flawed and made a big thing about refunding/dropping charges in 2019 (I think!) so technically you’d have reasonable excuse to not have known you had to pay it. I’d be surprised if you got penalties.

Original poster
whatanotherpalava · 10/02/2021 20:58

This is going to be fun! Accountant is not responsive generally. Have asked questions about the returns just submitted in January and no response 🤬

OP posts:
2Christmassybyhalf · 10/02/2021 21:05

Write to HMRC NOW and tell them. The difference between penalties for ‘unprompted’ disclosures and ‘prompted’ ones are substantial. Get proof you sent the letter, or maybe send a message through your tax account online if you can do that. Then penalties should not be too bad. But they definitely are charging penalties for this even though a fair number of circumstances meant they didn’t for a while.

Then talk to the accountant and potentially ask them to pay any penalties you do need to pay.

I repeat, tell HMRC NOW.

DM me if you like. I work in this area.

twolittlebears · 10/02/2021 21:11

You have to pay it back plus interest I think. Interest rates are low so might get off reasonably ok... I'm not sure about fines on top

Oblomov21 · 10/02/2021 21:11

Non responsive? And clearly incompetent. I suggest a new accountant ASAP.

superduster · 10/02/2021 21:14

Agree with others, declare to HMRC ASAP and tell accountant that you expect them to cover any costs or penalties. And then find a new accountant as they are clearly shit.

Original poster
whatanotherpalava · 10/02/2021 21:52

Right, will deal with urgently!

OP posts:
Therunecaster · 10/02/2021 21:57

This happened to me this year. No penalties but I had to repay 2k.

Quartz2208 · 10/02/2021 22:00

Yes I think you need to deal with it - it is a tricky one with the accountant as it strictly is separate but you have to remember as well they will expect you to pay it all back plus any penalties

Chronicallymothering · 10/02/2021 22:01

The thing is yes the accountant should have spotted the error, but you have to sign and verify the paperwork and what they've entered on your behalf. So the responsibility doesn't just lie with the accountant but also your DH I'm afraid. We had to pay some back once and we've never claimed since, not worth the hassle

Original poster
whatanotherpalava · 10/02/2021 22:23

@Therunecaster
Did you or your accountant report the oversight to HMRC?

OP posts:
Therunecaster · 10/02/2021 22:30

Me. I realised this year. I had to pay 500 for 19/20 and 1500 for 20/21. once I'd declared I am as a high earner I got a call from the HRMC fraud department but they were understanding and let me repay without a penalty.

Original poster
whatanotherpalava · 10/02/2021 23:10

@Therunecaster
OMG - fraud department 😱
I have a strong aversion to prison!

OP posts:
Therunecaster · 11/02/2021 03:00

Honestly they were fine. Just asked why I hadn't notified them earlier which was because I hadn't understood the high earner rules.

Try not to worry.

PhilCornwall1 · 11/02/2021 05:06

Oh, I got hammered with this. I knew squat about the high income rule. Not their fault I didn't know, but it's a bloody unfair one. Don't get me started on that.

I started to get letters from HMRC from about 2018 asking me to do returns for 2016 onwards.

I did have to pay up. I've not long done my 19/20 return and had to pay back a grand. I did claim for working from home for that year, as I did, so it knocked a couple of hundred quid off.

I won't have to pay anything back for 20/21, as we stopped receiving payment. I'm bloody claiming for WFH again, so hopefully they'll owe me for a change!!