Huge overpayment child benefit

[sarahjnm]

Hadn't realised living with £60k earner meant that I shouldn't rcve child benefit for my daughter. Only just realised. It's been 10 years.
Anyone else been in this situation? I'm guessing I pay all back and penalties too. Could be as much as £15k.
I'm feeling suicidal at the thought. Our family are struggling as it is with various other things.

This is right. HMRC generally only go back 4 years if it’s a genuine mistake - they can go back a lot further (20 years) if they think you’ve deliberately avoided tax. But you’ll most likely have to pay interest on what you owe, and they may also add a penalty (I think for careless errors that you proactively disclose it’s about 10% of what is owed, but sometimes they waive it). Good luck OP - you’ve done the right thing in engaging with HMRC, best to tell them before they find out themselves!

This has been much publicised and discussed endlessly. Can't see how you couldn't have realised. However, I doubt you will be expected to pay it at once. Ask for a repayment plan.

Does your partner do self assessment and factor it in? It's always been factored in to DH's self-assessment so he's 'paid back' what is over the threshold.

Wow, MN reeeeally hates men! The OP has been very clear that this is her oversight and they are now working together to sort out the situation. There is no suggestion that the DP is financially abusive whatsoever, and OP likely benefits from living with someone who earns much more than her! What kind of person would honestly just leave their DP with this kind of bombshell that they’re technically indebted to HMRC and they shrug because it’s “his responsibility”. 60k isn’t a massive salary, he probably doesn’t even do self assessment.

If he doesn’t have kids I can understand why he wouldn’t know the first thing about child benefit - I didn’t until I became pregnant and looked into it, and earned more than the threshold! He also probably doesn’t fill in a self assessment tax return for a salary of 60k - most people would have no reason to if that’s just a standard PAYE salary.

How does paying CB back work if your annual bonus takes you over 50k? Would you do the form at the end of the tax year once you had your p60?

Martin Lewis has been going on about child benefit for the last couple of years! He must take no notice of the news.
In came in January 2013 so it’s not new!
If they don’t share finances, she shouldn’t be penalised.

The threshold has changed so it's now £60k you start paying it back with it all paid back at £80k.

And yes you complete a tax return at the end of the tax year to calculate how much needs to be paid back.

@Mojodojocasahous yes you’d just report your income via self-assessment after the end of the tax year, and HMRC will calculate what you need to pay back. If you know you will go over and need to repay CB I’d save your payments somewhere so you have the money ready to pay back. You might be able to tell HMRC to stop paying you immediately, but I’m not sure about that.

This. Far better to claim it, declare it, and pay back anything owed over the threshold as you go.

Oh my goodness

He didn’t even know about the claim and now has this huge problem to deal with!

If you are not working I believe that you can claim child benefit, but not claim the money.
This pays your National Insurance "stamp" towards your state pension & other benefits.

Suggest check this with DWP, HMRC

I would say exactly the same if the sexes were reversed, or they were a same-sex couple.
When you move in with someone who has a child, you take on the responsibility of being fully part of that family, including financially.
As the CB is paid to the 'main' carer of the children, they usually have less earning power. The higher earner has a duty to either pay the tax, or give the lower earner the equivalent cash to the CB (as part and parcel of their financial arrangements as a family).

You have to know the history of CB. It used to be "Family Allowance", and was a tax break for people with children. Then it was decided to pay it direct to the mother (it was nearly always the mother) instead of adjusting the father's tax, as so many women didn't work and had no access to any money. They were at the mercy of their husbands.

Nowadays, the person, man or woman, who is the lower earner should have the CB (and of course a fair financial arrangement, as CB is a pittance).

On what planet does lying to the authorities not make a bad situation worse?

Legally yes his responsibility, morally considering he didn’t even know about the claim it shouldn’t be his responsibility. It just sounded like you was saying don’t worry it’s not your problem let your DP sort it, wether you meant that or not that’s what came across

Just pay it back with the money I'm sure he's paying you to make up for your "lost" child benefit. If you're married it's his issue to solve too

I fully understand the history of CB. However I also completely understand why a childless man would not have paid any particular attention to it.

Presumably when he was going marry someone they would have reviewed their finances.

I’m quite shocked by this! Obviously great news for OP but they effectively get to pocket 6 years’ CB that they shouldn’t have had. Seems open to abuse…

@Newposter180 absolutely! Ooh sorry hmrc I only realised now it's a genuine mistake, me taking money for my children from the state I've not been entitled to for 11 years but ooh silly me! My bad!

You should have to pay back every penny

In fact this is probably one of the reasons labour have had to increase taxes to sort out the massive hole in public finances, it's people like op who should have to pay back everything they owe

I'm sure we will, we've not had the final amount yet. Just one blinking phone call.

This tells you how to calculate adjusted income for child benefit payments. You can lower your income by paying more into your pension and donating more via gift aid.

www.gov.uk/guidance/adjusted-net-income

there is absolutely no reason to go through the rigamarole of claiming it and then paying it back via tax return

There's good reason to do so if you've a high earning partner who thinks having separate finances whilst living with a lower earner and just expecting the lower earner to forgo the CB is fine. Like OPs partner, for instance.