High income child benefit charge and separation - please help me stop the crazy

[HeathrowQuestion]

Can anyone shed any light on this ridiculous confusion please? I apologise in advance because this is both long and boring.

TL; DR - for separated couples, who is liable to the high income child benefit charge, the named claimant, or the person who receives funds into their bank account? HMRC have told us both completely different stories.

I am very not keen to call HMRC or child benefit as it uses hours of my day and frankly I don’t trust the advice given :(

long version..

I am separated from my ex partner and father of my two kids. The separation took effect just before the beginning of the 2021-22 tax year.

He always received payments of child benefit into his account but apparently the claim has always been my claim in my name. He always paid the high income child benefit charge, or HICBC, via self assessment.

In Feb 2022 we switched it so the child benefit went into my bank account for various reasons. My income is also above the £50,000 threshold but just below the point where I have to pay it all back.

I duly completed a self assessment and repaid the child benefit for the one month or so I was physically receiving it in the 2021-22 tax year. He filed and paid the charge for the remaining CB.

all ok or so I thought, and then HMRC wrote to me saying I needed to amend my tax return, I spent hours on the phone to them and they told me that actually, for separated couples the payee is irrelevant and it is the claimant that is liable to the HICBC.

They told me to amend my return and pay the full charge (or almost) and for him to do same and trigger a refund.

He then decided to contact HMRC to check the position out for himself. He got the exact opposite advice, which was we had done things correctly by each paying the HICBC for our share of actually received funds.

now I am confused, and also worried about penalties and fines if I don’t amend my return. I am potentially having to spaff my whole cost of living payment repaying a benefit I did not actually receive. And I’d have to cancel a planned holiday next yr…

there are no new resident partners on the scene in either my or the ex’s house by the way.

Can you message them (it might need to be inside a Government Gateway account to get personal advice but check as I've heard it said on a few consumer programmes that the reason waiting times on the phone are so long is that they want people to message them but people are phoning instead).

Which makes sense because it's a lot easier to convey and understand potentially complex advice in writing and if they do this you have proof of what they actually said, eg do you know that your ex was given different advice or is that just what he thinks he was told?

It can also be more efficient as you can send a message and leave them to it to reply.

However I suspect that there is an element of confusion about who is the named claimant vs the account holder who received the money so it's important to be very clear about this when sending your enquiry.

It might also help to carefully read all questions and guidance in the tax return forms as it might be covered there. Eg I think it talks about repaying CB because someone in the household is a higher earner so that might clarify matters? Maybe try this from both your point of view and his to see if it gives the same conclusion?

When you were married, it was irrelevant who received the money, you were the claimant but your DH earnt more so he paid the HICBC.

Then you split but you were still the claimant but no longer have a partner so the highest earner is you so you pay the charge. You have been told the correct information.

Details on here

https://www.litrg.org.uk/latest-news/news/230811-your-ex-partner-receiving-child-benefit-your-child-read#:~:text=Child%20Benefit%20office.-,The%20high%20income%20child%20benefit%20charge%20on%20separation,does%20not%20live%20with%20you.

@BarbaraofSeville that is an excellent point about secure messaging - I’ll do that, I definitely need a paper trail.

I looked at the internal handbook for HMRC and it is useless, it doesn’t cover this situation. Sadly.
@buckingmad thank you, but he is the higher earner and HMRC told me this does not matter when you are separated, it must be repaid by claimant, which makes sense to me actually.

@PickledPurplePickle the LITRG guidance is exactly what I saw too. I am wondering if it is incorrect though!

what a headache. All I want is to ensure the correct charge is paid by the correct person and not receive a massive fine!

Just to check so you don't get more of a tangle, you said My income is also above the £50,000 threshold but mentioned cost of living payment you're getting, will they not ask for this back? Not thinking you need to disclose your personal info as think that can come due to dla/pip etc but so you don't get any more surprises!

@HeathrowQuestion yes he’s the higher earner which is why he repaid it even tho you were the claimant when you were married. But now you are separated you don’t have a partner (the partner with the higher wage is liable to the charge) so the only wage is yours, so you repay it.

There was a tribunal where this happened https://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j12758/TC%2008844.pdf

In short, the ex husband was liable because he was the claimant originally, even though he never received the money.

@LorraineBainMcFly the cost of living payment is not the benefit related one, it is from my employer, sorry, that was not clear.

@buckingmad yes that is exactly my understanding, and I saw the tribunal decision. But then in the LITRG guidance there is something about the liability transferring to the other parent who actually receives the money or some such, which confused me even more.

Think there is nothing for it but to go back to HMRC for clarification. Gah.

@HeathrowQuestion oh no apologies needed!

Trying to call HMRC - they are busy and can't deal with my call. Excellent!

Same thing happened again - self assessment telling me he is liable, child benefit that I am. It's absolutely ludicrous, I'm going round and around in circles.

Okay, in case it is helpful to anyone else (but take your own tax advice, IANA tax advisor).

The upshot of it is.... it is indeed me who is liable. But because we have between us paid the HICBC, they can't claim it back from me as they aren't allowed to claim the same money twice (apparently, because it's been repaid once).

To rectify our administrative anomaly, I do not have to amend my tax return nor the ex his, but instead I have to write to both HMRC self assessment and Child Benefit explaining the nature of what happened in 2021-22 and why two people have paid elements of the HICBC.

At one point, I had two conversations going, one with self assessment bods on the online chat, and one with the Child Benefit telephone helpline. Child Benefit told me I was liable, SA told me initially that ex partner was liable, then that we were both liable, then that I was liable but not to worry as I could just write a couple of letters. At the same time I had the CB officer telling me it was definitely me who was liable. So that's all nice and clear, then!

And a timely warning to anyone who has recently separated from their partner and who may be liable to the HICBC, or who has an open CB claim and who has a new resident partner earning above £50,000: Get your child benefit affairs in order and understand what you are both likely to be liable for!