Child benefit nightmare

[dancingqueen123]

I have been paid this since kids were born. Never thought anything if it, as I thought it was a universal benefit to Mothers.
DH has had a letter saying he's over the threshold. Has been for some time.

I'm really worried. Why didn't they just stop paying us it?!

Will they just slap us with a humongous bill now?
Things are really tight right now. Really don't need this 🙈

You need copies of his P60's for the years they are claiming back, then put the amounts into the calculator that someone posted further up so you know a ballpark figure.

If he is on just over £50k it won't be a huge amount - I think one year we had to pay back less than £100 but now DH is near the £60k mark, we now have to pay back nearly all of it.

Depending on when you speak to them it depends if they agree a payment plan or not, they would not accept one from us as it was near year end, but we were able, just, to pay it all back by an agreed date.

Make sure you do any tax returns before 31st January as that is when fines etc kick in.

You may also get some late fees or fines so the sooner you sort it the better - I don't think we had any fines but did have to pay some interest, I think.

Below £60k you still get it, but you will need to pay back part so you will have to decide after you get the figures together if you carry on claiming as you can still get the pension credit part you just opt out of receiving the money.

If you go onto gov.uk/child-benefit-tax-charge it will explain it all.

This is one thing the government need to sort out as the thresholds are so unfair and out of date.

I have just done a little example using the calculator for the years 2021/2022 if he earned £53k you would have got £1827.80 child benefit and you will need to pay back £548 so it is still worth claiming, but obviously to get the correct figures you will have to do a self assesment.

If there are loads of years they are asking for we phoned them up with copies of the P60 for the years they were asking for and they took the details and told us the amounts and then sent a letter with it all in, then the following year we had to do a complete self assesment.

You can backdate pension contributions for up to 3 years ( I've done it). www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings

@stopringingme that's presumably with no deductions though, he can remove pension contributions which will hopefully be a good chunk off. So hopefully if he's "just over" £50k, he may be under after deductions.

@Reallybadidea SueVineer didn’t say you can’t carry forward allowances. She said you can’t backdate “like that”. She’s right - you can carry forward for the purpose of a pension, but you can’t then ask to have your CB adjusted -that’s related to pension payments actually made in the same tax year.

Doesn't he do a self assessment tax return every year?
Is he claiming his higher rate pension contributions? That's also done via the self assessment form.
Is he paying his additional tax on savings (if due).
It may be worth taking a bit of a deeper look at finances in case this is not the only fuck up

@ArcticSkewer he’s most likely PAYE with a workplace pension, so no SA and workplace pension contribution deducted before tax so highest rate of relief immediately applied.

Even with a personal pension, I avoided SA for several years by getting my HRT relief by calling HMRC and asking for my tax code to be adjusted.

I agree with you; if a letter was triggered after x amount of years, why wasn't it triggered sooner? Although as others have posted; it is common knowledge that £50k is the semi-cut off. Was even mentioned in the news again before the mini-budget (why hasn't the £50k been raised) Not that, that helps you now.

Hopefully with pension contributions it won't be as bad as you think.

If pension contributions bring it down to £50k do you still need to do a tax return?

My accountant said no, HMRC won't thank you for filing a tax return if you don't need to.

Depends if you have, for example, savings you are not paying the right amount of tax on, or benefits in kind you need to declare, or expenses you want to set against it, or capital gains you need to pay tax on, pensions contributions you need to claim the higher rate for etc.

I'm amazed by all these higher rate taxpayers who don't need to claim anything or declare anything (except then it turns out, yes they do eg child benefit)

Thanks - we don’t have significant savings and have only just tipped over the £50k in the last couple of months. It’s really not a high salary for a family with a high mortgage, yes it’s better than lots but in no way do we feel well off, but a very squeezed middle.

Do you know what happens with separated parents? For example, if a mother has the children and ex-husband (father of the children) is a high earner, can she get child benefit if she earns under £50,000?

Yes they absolutely will. They don't tell you anything, your meant to know everything!!! I had a £900 overpayment to pay as I didn't realise its stops with apprenticeships

Separated parents are not assessed together so it has no effect on the non resident higher tax rate payer in your example @Goldfishmountainclimber

You’ve misunderstood. You can carry forward pension allowances from previous years (you can only contribute £40k a year to a pension). That’s not the same as using pension contributions to reduce your adjusted net income for previous tax years for the purpose of child benefit. That’s not possible.

www.gov.uk/government/publications/high-income-child-benefit-charge-data/high-income-child-benefit-charge

I quite literally cannot get my head around this. It makes no sense. Call me stupid or whatever. I’ve opted out of receiving child benefit now as my partner earns over £60 but how do we find out how much we will need to pay back? 😞

Oh no, how did you not know this? I've seen a lot of previous posts on mumsnet about the same thing. It was my immediate worry when DP got a pay rise this year to exactly 50k. I am presuming that this tax year is ok as he earned less than that for half of it. But he's eligible for a bonus which will tip him over the 50k next year so I'm resigned to us having to do a tax return as I don't think it will be over 60k.

As an aside, it really annoys me that they don't take into account the lower threshold for higher rate tax in Scotland (43662) with this. As we only see less than half of his pay rise but it's putting us into this range the same as someone in England who only pays the normal tax rates up to £50270 which is more in line with the reduction in child benefit. And my salary is low as took a massive pay cut due to caring responsibilities. But we all look at it from our own perspective I know. Just hard to feel all that comfortable with the cost of living and really wish this could be calculated without having to learn how to do a full tax return when we have both always been in salaried jobs so have no idea about that.

Hope that you can sort out a payment plan so it's not too bad.

Thanks, ArcticSkewer.
What about an unmarried couple living together with children? How do they actually know people’s circumstances?

@Goldfishmountainclimber

If you live together surely you disclose income???

When mu dh reach 50k. Yes this happen to us couple years ago. I need to give it back. After i give back bug lumpsum i think around 2 grand. I close my CB straightaway

My DH had to do a tax return every year. He got fed up of them so now we don't claim it. How many years has it been OP?

Sorry just saw how old they are. As he never been asked to do a tax return? My DH was asked to do them straightaway

@dancingqueen123 don’t worry. They will likely sort a payment plan. It’s rubbish but you won’t be the first or last. I agree they should remind people of this - they manage to send enough reminders when they want something so it’s not much to expect. Try not to worry you’re unlikely to have to pay it in one go. If you call and get through to a tricky sounding advisor I would hang up and try again, some are arseholes, some are lovely, and you need kind words not some robot on the end of the phone xx

Lots of people still claim it as it goes towards your state pension qualifying years