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Repaying Child Benefit for 2013.

We act for the wife out of a couple with two children.

The wife's income is just over the child benefit withdrawal threshold. The husband's income is more.

The wife is on self-assessment and the husband is not.

They have just realised that each thought the other had repaid the overpaid child benefit, but infact neither has.

The wife thinks that only she can do this now, and also that only she can stop the receipt of tax credits. However when we read up on this it seems the highest earner has to make the repayment. If we try and amend the wife's return for it, the calculation does not result in very much of it being repaid.

Are we correct in thinking that the only way to repay the overpaid benefit is for the husband to register for self assessment and declare the overpayment and this will result in penalties (including the £15 a day)?

Who can stop the receipt of payments going forward please?



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07th Jul 2014 16:39

You are partly correct

The husband should have registered for Self-Assessment and should repay the appropriate amount of child benefit through that - ridiculous system, but that's it.

If you attend to this now, there will be no daily penalties (£10 per day rather than £15) as you will have 3 months to file the Tax Return, so it wouldn't be late.

What you might get is a 'failure to notify penalty' as the husband should have told HMRC about the need to repay the child benefit by 6th October 2013, i.e. 6 months after the end of the tax year.  However, in practice, I have never seen one of these raised.  Even if it is, it is a percentage of the tax outstanding at 31st January 2014, so would be very little I would assume.

Finally, it is up to the person who is receiving the child benefit to notify HMRC that they no longer wish to claim.  So basically, the wife should look at her income, look at her husbands and if she feels it is too much and she doesn't want to claim, should notify HMRC accordingly.

Its worth noting that I only tell clients not to claim it if the income exceeds £60k.  For income between £50k and £60k, you are still entitled to some child benefit so in these cases are better to receive it and pay some back at 31st January each year, rather than completely lose out.


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By K81
07th Jul 2014 16:44

Highest Earner

The child benefit charge is levied on the higher earner.

The husband will need to register as self-assessment. As long as the tax return is filed within three months of the date that it is issued there will be no late filing/daily penalties however interest will be payable on any tax/child benefit due & a possible penalty for late notification of self-assessment.

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