CHB penalty, over the threshold.

[Anna0910]

i wonder if anyone experience this and can offer some advice.

I am a single parent of 1 and a friend moved in a couple years ago due to covid etc and we eventually got together. Neither of us were aware about the 50k threshold or even heard of self assessment thing. He’s on over 60k and no other benefit except CHB and i overlooked it as benefit because as far as i was aware it wasnt mean tested and everyone got it. I didn’t even know how much he earned then. Only recently as i’m trying to gather all financial information for a mortgage application i come across this and it has been keeping me awake ever since! I know i will have to pay back the CHB since the day he moved in regardless of our situation then but anyone has inclination on how much penalty we would have to pay?? I read that they charge £10 per day for 90 days plus plus?! Which route do i take first, call them up or do self assessment? Doesnt the high earner need to do that?

My partner is very annoyed as we are looking at thousands of penalties and its not even his child (nothing i can do about that!). We are also paying high rate student loan :( i am just stress at the thought of dealing with HMRC tbh. They werent very nice when i had to deal with them years ago.

What are his exact earnings? The £60K is on taxable income, so make sure you account for e.g pension contributions etc.

You pay back a sliding scale of Child benefit between £50-£60K of taxable income; so depending on his actual taxable income you may not owe it all back.

First step is for him to outline all his taxable income between when he moved from “lodger” to “partner” and now - his P60s may help here.

Then he needs to register for self assessment, if he hasn’t done so already. He also needs to speak to HMRC about previous years - he may have to pay a penalty for the missing previous years; only HMRC will be able to tell him what he’s looking at, as it’ll depend on your specific circumstances. Rough guesstimate would be £100 plus up to 100% of what he owes on the child benefit charge (plus having to pay the actual child benefit charge).

thank you Dyrne. With all his bonus, my guess last tax year is around 90K and i think his pension is taken after tax. We are not married so we keep separate finances. How do we proof the logger to a partner period to HMRC as i read they only take into account the date he moved in?
No self assessment yet, we never even aware of it until now! I always thought thats only for self employed.
So based on your guesstimate, per say for 2 years its 4 x of the yearly child benefit received of £1135? Thats a lot for me. Would they normally reconsider the penalty charge through appeal? I started claiming since before this rule applies so genuinely thought everyone get it and he doesnt have children so neither of us even look at it in the past.

Honestly it’s something you’ll need to discuss directly with HMRC, as they may take circumstances into account; or be willing to discuss when you went from “lodger” to “partner” (for example if you have a tenancy agreement etc from the period he first moved in to prove he wasn’t a partner then).

Generally though, ignorance of the law isn’t an excuse - HMRC are likely to take the view that it’s your responsibility to understand the impact of changes in household status on your benefit/tax requirements. They’ll likely offer a payment plan and won’t necessarily expect you to be able to pay everything immediately.

Thanks Dyrne. I will see to call the helpline and see what our next step is. We arent too late for this year self assessment so hopefully that helps.

Hi, can I ask if you got this sorted? I’m in this exact position and I’m mentally on the edge worrying about the penalties. Not bothered about repaying the child benefit itself but petrified of the penalties

Hi yes we sorted it. We ended up paying an accountant to do it for us. Cost about £400 for the accountant because of the extra work. We did have to pay back the 2 year child benefit and £50 interest but we didnt have to pay penalties or anything luckily. Although I feel like I’m still waiting for a letter to pay some charges because we still have to pay this year’s.

How many years have you got to pay back? I understand the worry, I had so many sleepless nights. My partner and everyone else said to just stop claiming but dont declare but I’m glad we did.

I hope you get it sorted x

Thanks so much for your reply.

We owe for 2019 a full years worth and 2020 my partner earnt 54k so we owe a portion of that too.
I did claim 3 months in 2021 until I realised and cancelled but he earnt 54k that year too so I think I don’t owe too much if anything that year as I did only claim the 3 months which probably equals the amount I would be entitled to with him earning 54k that year.
it’s just the penalties for those years I’m scared of. Did you get penalties and appeal them or didn’t receive them in the first place? X

You'll need to ring and ask but they will most likely want to see your bank statements to show that he payed you for 'lodgings' then those payments stopping once he became your partner. They'll also expect to see a written agreement for period he was a Lodger only. It won't be as bad as you think. I'd ring them before you do the self assessment.

That would be similar to us. We paid back partial 2021, full 2022 and partial 2023 which we are still waiting for the letter. So far all we had to pay was the £50 interest. So we might still get a letter this year for the penalities… I hope not.
@caringcarer we did think of the lodger route which was true for the 2021 but we never had a contract or agreement. The tax helpline was not very helpful for us, they just told us to do it online and get a code. Which they failed to generate and we had to call multiple times for 2 months. It was all too stressful for us hence the accountant route. He had to submit all bank statement, P60, savings, a lot of forms to fill in.

@Lucieee09090 dont stress too much about it like I was. We had so many arguments! In the end, it wasnt too bad. Even if we have to pay penaltıles eventually, you can ask to pay by installment etc xx