HICBC list from HMRC - How accurate is yours?

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On 18th December I received a letter from HMRC headed “Please check your client’s Higher Income Child Benefit Charge declaration”. The letter went on to say that HMRC would provide a list of my clients that either don’t include the HICBC on their SA, or they include the wrong amount.

I requested the list and of the 10 individuals listed:

   3 had correctly included HICBC on the return of the highest earner in the household,

   1 doesn’t receive child benefit at all,

   2 consistently have income under £50K (and so does their partner), and

   1 I’ve never heard of.

This leaves only 2 tax returns to amend.

 

Has anyone else had any experience of this and have HMRC followed up on the unamended cases?

 

Replies (17)

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By rmillaree
06th Feb 2024 11:09

crazy that with stuff like this they wouldnt take the sensible option of simply uploading info like this to specific place in agent area by default (or send in the post without having to request) - would be a boon to have prompt info matching what hmrc are collating automatically in agnet area rather than info existing and being hidden from us till we go chasing for it - similar one being warning letters for clients near vat threshold.

Fair play to hmrc for doing something semi proactively here

"Has anyone else had any experience of this and have HMRC followed up on the unamended cases?"

I have to presume they will do but presumably they are hoping that the agents will do the detail of checks and sort before they have to go go through list to manually work out which ones are defective.

Note i have found clients to be particularly unreliable ref dates child benefit ends i have had multiple individuals tell me child benefit has finished before it has done when kids left school - and i have had to really push them to check bank statements before the truth outs - the last 2 i did it was normally very diligent peeps too !

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Replying to rmillaree:
By ireallyshouldknowthisbut
06th Feb 2024 11:28

The end date should be the september following when they leave education.

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Replying to ireallyshouldknowthisbut:
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By rmillaree
06th Feb 2024 12:12

Yes i should probably have highlighted that fact - even knowing that they still get it wrong lol - heyho i have been in wrong year mode before so it can happen to the best.

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By ireallyshouldknowthisbut
06th Feb 2024 11:27

I sent a rather rude letter to them about the lack of the list, and they responded within a couple of weeks with it.

Out of mine, I had 4. One of which was n/a the other 3 are relevant.

One question I had, is how many years are we supposed to do?

I was going to revise the 22/23 and 21/22 and then write in with the previous two but ignore the five and six it's as presumably there is not a formal "discovery" so the time limit is 4.

Appreciate if one of more technical respondents can comment on that.

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Replying to ireallyshouldknowthisbut:
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By rmillaree
06th Feb 2024 12:43

oh dear perhaps life is easier without this letter

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Replying to ireallyshouldknowthisbut:
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By More unearned luck
06th Feb 2024 13:49

You can only amend 22/23. Before 31/1/24 you could also have amended 21/22.

If tax has been underdeclared then the client should make a voluntary disclosure using the WDS. That includes the taxpayer making a self-assessment of his/her conduct (and that of any one acting on his/her behalf). If that assessment is carelessness then you go back six years. If the assessment is deliberate then 20 years. . If the omission of HICBC was made despite taking reasonable care then the limit is four years. Of course, HMRC might not agree with the self-assessment of conduct, if a too lenient view is proffered.

I assume that the disclosure will count as 'prompted'. Penalties are based solely on the taxpayer's conduct.

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Replying to More unearned luck:
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By David Pattman
07th Feb 2024 07:51

Thank you so much for this. I have been looking at HMRC v Wilkes in which is seems that HMRC are on rocky ground if they intend to use a discovery assessment. Presumably if the SA for 2022/23 is correct and 2021/22 is out of date, it would be interesting to know what powers HMRC can use. Every day's a school day!

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Replying to More unearned luck:
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By David Pattman
07th Feb 2024 09:49

Thank you very much for this. Still looking at this...

I've been looking at HMRC v Wilkes article in Tax Advisor Magazine and the writer, Keith Gordon, says "...the court could not be ‘abundantly sure’ that Parliament had intended HMRC to use discovery assessments to recover HICBC."

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Replying to David Pattman:
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By More unearned luck
07th Feb 2024 11:50

But the law has been changed retrospectively and in any case it was only ever a defence for people who didn't file an SA return for a relevant year. If the law hadn't been changed there would still be no procedural escape route for years where a wrong SA return was filed. Culpability determines, of course, how far back you need to go.

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Replying to More unearned luck:
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By David Pattman
07th Feb 2024 12:18

Yes, I've read it again and I agree with you. Thanks so much.

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RLI
By lionofludesch
06th Feb 2024 18:01

Being an ex-accountant, I added them up and got 9.

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By bernard michael
07th Feb 2024 10:46

I make that 3 to amend

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Replying to bernard michael:
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By lionofludesch
07th Feb 2024 11:00

Not necessarily, Bernard. The spare fella could fall into one of the other categories.

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Replying to lionofludesch:
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By bernard michael
07th Feb 2024 11:21

lionofludesch wrote:

Not necessarily, Bernard. The spare fella could fall into one of the other categories.


Too true. Put it down to semantical inexactititude
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Replying to bernard michael:
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By David Pattman
07th Feb 2024 11:39

Sorry guys, you missed the partner.

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Replying to David Pattman:
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By lionofludesch
07th Feb 2024 11:44

David Pattman wrote:

Sorry guys, you missed the partner.

One partner between them?

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By Dogracer
07th Feb 2024 17:50

Never seen this but I think it makes sense. It is surprising in this day and age how many people do not know how much their partner earns or if they claim child benefit

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