Child tax benefit still being paid with high earning husband

[SAHmama2020]

Hello!! It has just come to light that I should not be getting the child tax benefit that you get if you earn upto £50K. My husband has been earning over that (wage increases every year for for 4 years up untill now at £100k this month.
I have not worked or worked enough in 8 years to pay tax other than NI contributions.
I have 2 children so receive £140 a month.
I am at the point now I can’t sleep not knowing what to do worrying I am going to jail for something we didn’t know?! I was claiming 30hours childcare when I was working up untill December 2020 which I was updating with both our info so why has child tax overpayment not been flagged up through there as it checks your earnings, NI, PAYE to make sure you are eligible for the free hours?!
Since we moved counties and I stopped working it then changed to 15 hours and at the time my husband was on £87K.
I am aware I have to report it but any info is much appreciated?!

Thank you ladies for the information. I think the problem here is that my husband does not do his own self assessment, the finance guy does them. So my plan is to ask what he is putting on the self assessments and see what boxes need ticking!

You are all right in that I was confusing childcare and child tax benefit as I just thought maybe it would flag up when you do the quarterly application for the code. Anyway that has stopped now as my little girl has started school.

So next step is finding out what is on the self assessment!

If your DH has a tax return, doesn't matter who prepares them, he signs them as correct

By finance guy do you mean he is PAYE - paid a salary deducted at source by the employer or is the finance guy an accountant/ bookkeeper he gets to do his tax returns?

Yes, your DH will have approved the tax returns even if someone else has done them on his behalf so he really should know what is in them. Hopefully he used someone qualified who knew what they were doing and not just an 'HR guy' otherwise you might now have a very big bill.

Not that I would do this but....

Could you just ask payments to stop now and just leave it? I don't think HMRC would ever catch up with it... their systems just aren't that joined up.

We got stung fairly recently as a bonus took me over the 50k and I wasn’t registered for a self assessment. FYI HMRC will only adjust tax codes to recoup if the total owed is under a certain amount (I think it’s 3k) anything over can’t be taken from tax free allowance and has to be paid back directly in lump sum or payment plan.

They do catch up with people eventually. I have seen threads on here where they ask for it back a few years down the line and by then it can be thousands of pounds

Yes I have thought about this. Maybe because I am telling them it doesn’t make them look into it and they would would just tick the box on the computer and that’s it, done! However In the real world that may not happen and they will ask me lots of questions of which I don’t have the answer to!

So Husband has informed me tonight that he is getting an independent financial adviser to look over it as when I asked him today that he must be signing his self assessments off every year to which he said he doesn’t. He is a director (not company house director) so his wage doesn’t get sorted by the Uk company but by the bigger company that owns the company he works for (if that makes sense!) I’m trying to explain with out giving information and company names out here!! So it’s the International head office side of the company that deals with his wage and tax! Honestly I am flummoxed by it all!

Has he ever registered to do a self assessment tax return or did he expect someone else to do it for him? He should have log in details that were sent to him.

Definitely don't panic op. This has happened to loads of people including me. You just call HMRC, confess and they'll sort a payment plan.

@Yellow85 We got stung fairly recently as a bonus took me over the 50k and I wasn’t registered for a self assessment. FYI HMRC will only adjust tax codes to recoup if the total owed is under a certain amount (I think it’s 3k) anything over can’t be taken from tax free allowance and has to be paid back directly in lump sum or payment plan.

Thanks for that I’ve wondered why we were never offered the payment plan, that explains it!

I'm a Company Director paid via PAYE A and dividends. Our accountant does my self assessment and sends it to me to approve. I don't have to physically sign anything. He submits it on my behalf.

Your DH might not sign anything but he should see a copy before it is submitted.

@SAHmama2020

So Husband has informed me tonight that he is getting an independent financial adviser to look over it as when I asked him today that he must be signing his self assessments off every year to which he said he doesn’t. He is a director (not company house director) so his wage doesn’t get sorted by the Uk company but by the bigger company that owns the company he works for (if that makes sense!) I’m trying to explain with out giving information and company names out here!! So it’s the International head office side of the company that deals with his wage and tax! Honestly I am flummoxed by it all!

He doesn't need to spend money on a financial advisor (unless he was going to do it anyway), you can call up on a freephone number to speak to someone at the tax office, explain what's happened and ask them to tell you how to put it right.

It really isn't anything to do with his employer

I claim it, DH pays it back somehow. On his self assessment form.

I need to claim it to get my NI stamp paid. So it’s a bit of an oddity. If you don’t claim it you’ll lose out on your NI contribution.

You can claim and opt out of payment and still get the NI credit @DobbyTheHouseElk

@SAHmama2020

So Husband has informed me tonight that he is getting an independent financial adviser to look over it as when I asked him today that he must be signing his self assessments off every year to which he said he doesn’t. He is a director (not company house director) so his wage doesn’t get sorted by the Uk company but by the bigger company that owns the company he works for (if that makes sense!) I’m trying to explain with out giving information and company names out here!! So it’s the International head office side of the company that deals with his wage and tax! Honestly I am flummoxed by it all!

So it sounds like your earlier post about someone else doing his Self Assessment for him wasn’t correct.

It’s not unusual to have someone complete the form on your behalf - many people have an accountant or family member do it for them. I do my husband’s and mine, my sister does my dad’s. It’s electronic, there’s no signature so it’s possible to do it without seeing it. However - the person completing it needs information that they can’t get simply from a company payslip, because it covers your full taxable affair - not limited to but including things like share dividends and of course child benefit.

So you initially said that someone was doing it for him - fine, if they were getting his information from him. But now it doesn’t sounds like no self assessment has taken place. It sounds like what your describing is just basic payroll and PAYE, meeting his tax responsibilities on his income from that company.

Self Assessment doesn’t replace PAYE. All my income tax on my salary is paid by my company. When I do my SA, I have to state what has already been paid. Then I compete the other sections (including CB) that are not the related to my employer, and the calculation is made.

If he employed by a non-UK company, he still pays tax in his country of residence. There are various rules around how many nights you stay, but that’s the basic situation. It might be that he has some tax liability in the country of the company too, and whatever “finance guy” is doing may relate to that. My (non UK) company had to submit how many days I’d spent in the non UK office, for example. HR handled that, I never had to sign anything.

HMRC will help him unravel it, and sort out the repayment.

Did you also claim Tax Free Childcare when your DH was earning over 100k? Because I think that's a no-no too...

Sorry, I've just re-read and made more sense of it - whilst you were both working (& DH earning under 100k) you got 30hrs of Early Education & Childcare, but this dropped to the universal 15hrs of Early Education & Childcare once you stopped work. Got it.

For anyone earning around £50-60k with kids, you will get more CB the more you put in your pension. I’m not in this fortunate position, but a good friend has just had a salary bump to £60k. Youngest born in 2011, 3 kids under 16.

We’re in Scotland so paying 41% in that band. I did all the sums and cake up with this (these are based on direct payment to a SIPP - a salary sacrifice through payroll would give more because of NI).

“ If you contribute £10000 a year to your pension, (you only need to put in £5900 and £4100 will be tax relief), you’ll then get £2555 in child benefit.
In other words, it will cost you £3345 pa from your family income to have £10000 a year in your pension pot. You are tripling your money.”

There are enormous financial benefits to paying into a pension (and additional voluntary payments) to drop taxable income to £50k (or anything below £60k) when CB can be claimed. So, depending on OPs OH initial salary move into £50k+, this might not necessarily be taxable income - it’s all pension dependant

Subject to annual allowance of £40k (backdated across several tax years) and lifetime allowance of a bit over £1m

Sorry, the maximum of £40k can be backdated across several tax years, so if it wasn’t reached for the last few years, more than £40k can be added this year.

Pension contributions are deducted to calculate net pay

Hi OP,

We had similar happen to us. We were genuinely unaware we were no longer entitled to it when my DHs pay increased. We owed just under £3k in repayments. They're letting us pay it off monthly over a year.

beenaboutabit do you mind if I PM you to ask further about the benefits of dropping your income/putting more into pension?