Child Benefit Overpayment

[SwatchIt]

We’ve realized we’ve been receiving child benefit and not paying tax on some of it when we should have been, it’s all a little confusing with doing a self assessment for it as we are both PAYE.

We’ve decided it’s easier to stop it as there isn’t much point in taking it based on how much tax we have to pay on it anyway

Has anyone else had an overpayment and how did you pay it back? Online research says you might be able to arrange a payment period? We would like to do this over as long a period as possible. Any advice greatly appreciated!

Good luck with that. Dh repeatedly told them we didn’t want child benefit anymore. He emailed and phoned. They kept paying it. We suddenly got a shitty letter telling us we had been overpaid and they’d be taking a few hundred pounds back from us every month, starting immediately. They’re absolutely bloody useless. Luckily we could afford it but it could have made life very difficult.

I made this mistake for years! Quickly cancelled it when I realised. Tax Office were v helpful, knew I was genuinely just an idiot and gave me the v lowest fine they could, but I Ended up owing about £3k. Am paying back a monthly amount.

When I phoned up to cancel (as I had a promotion) they were brilliant and cancelled it immediately. Give them a call (but be prepared you may be on hold for a while and avoid the busy lunchtime slot). But yes you can arrange a payment plan.

dh's salary just tipped into it whilst dc3 was in the Upper 6th.
It took about 4 hours on the phone to them to sort out.
As you are, we are PAYE and we'd never gone near Higher Rate tax areas in all the years we'd had Child benefit so it never crossed out mind, but they seem ill equipped to deal with it, considering it must happen to lots of people.

I'm guessing one of you earns £50-60k? When was the first year you think you/partner earned over £50k? I'm a tax accountant and deal with these things all the time if you want to PM me, but essentially, for every £100 over £50k, you have to repay 1% as a tax charge.

So my friend earns £51/52k & just keeps the approx bit aside, but a client of mine earned £58,500ish last year & has decided to stop it. It's pretty easy to declare it online going forward however.

I made the change online, it took 5 minutes

Make the change online, just cancel it, it's far easier.

re paying it back, try and call them if you have to good fortune of actually talking to someone arrange a payment plan with them, otherwise wait for a the letter and then do it

@Passthewinebottle

I'm guessing one of you earns £50-60k? When was the first year you think you/partner earned over £50k? I'm a tax accountant and deal with these things all the time if you want to PM me, but essentially, for every £100 over £50k, you have to repay 1% as a tax charge.

So my friend earns £51/52k & just keeps the approx bit aside, but a client of mine earned £58,500ish last year & has decided to stop it. It's pretty easy to declare it online going forward however.

Thank you for all your replies!

Yes my DH now earns between £50-60k and has done for about two years. I assumed it was still the same for up to £60k, this situation between £50-60k seems complicated and unnecessary but that’s another thread I guess.

@Passthewinebottle would you advise we jus cancel is as another poster has suggested and then wait or call them and sort it out that way?

@Passthewinebottle I wonder do you have a view on my situation?

Rounding for ease of explaining. In 17/18 I got promoted and I knew my taxable pay after pension etc for that tax year would be £55k so I was going to have to pay 50% of the child benefit back. With two kids the full child benefit was £1,800 per year

I knew that from 18/19 on my pay would be over £60k so there was no point in keeping claiming as the tax would be 100% of the benefit

So in sept 17, exactly half way through 17/18 tax year I cancelled my benefit so instead of receiving £1800 and paying back 50% ie £900, I opted to just receive the net amount I could keep - ie £900

Now nearly four years later Hmrc has contacted me and said based on my earnings my tax bill is 50% of the £900 I received and they want £450 plus interest and penalties from me!

They refuse to accept that this is unfair as their on line calculator works it out at this. Their own website says that cancelling your payments does not cancel your entitlement to child benefit so I’m saying the 50% should be applied to my entitlement - not the amount I opted to receive.

The simple answer would be for me to go back and reinstate my child benefit claim from sept 17 to March 18 and receive the extra £900. Then they would assess me as owing £900 from £1800 received rather than £450 from £900 received!!!
But they took so long to contact me the two year window to back claim is now closed

If you’re still with me then well done! I’ve paid the money to stop interest running but have opened an appeal to try to get it back - the officer dealing with it says it will likely go all the way to a tribunal but in his view I should win as it’s wrong and unfair how they calculate

Have you ever heard of this or do you have any advice?

@SwatchIt
See my post - if one of you earns between £50k and £60k don’t cancel in year or you will be out of pocket like me!