One of my client's had a family (husband) bereavement in the last year and has since been receiving (taxable) Widowed Parent's allowance.
The guidance on teh WPA states that you are eligible if (amongst other things) "you’re getting Child Benefit for at least one child and your late husband, wife or civil partner was their parent" (see here)
As my client earns approximately £75k she is not entitled to teh child benefit and she contact HMRC to ask them to stop paying (before I advised her to claim and repay)
My concern is, that as she now is not getting Child benefit, she is not entitled to the WPA
If true, for her this could mean she is paying an effective tax rate of over 100% as she will be paying 40% tax, losing child benefit for two children and potentially the WPA
Can someone put my mind at rest whilst I go and re-check!
Thanks
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Replies (7)
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I think it's the entitlement to receive CB that counts, not whether it is actually received.
I think you are right.....
And that is my gut feel I am just seeking written clarification.
Having spent a while searching I cannot find a definitive answer - even a TC with the DWP didn't shed any light.
If choosing not to receive CB after January 2013 was going to have a knock on effect on entitlement to other benefits the HMRC letters to taxpayers in late 2012 should have contained a health warning, but as I recall they didn't!
Looks like a double whammy to me.
She could claim bereavement allowance instead based on her circumstances:
https://www.gov.uk/bereavement-allowance/eligibility
but she can't because she's bringing up children!
Heartless.....(edit) isn't it.
Can she not just claim child benefit again?
I'm not sure of the answer to your original question but if she is not entitled to WPA due to not claiming child benefit can she not just reclaim it and pay the child benefit tax charge through her tax return?
I'm no expert in the benefits system but I was under the impression that the High Income Child Benefits Charge was a one off for 2012/2013 because Gideon decided that quick action was needed and 7 January 2013 was arbitrarily chosen as the date from which the charge would apply.
I had presumed that in 2013/2014 and thereafter any claim for Child Benefit would be refused if the income of the highest earner was greater than £60,000.
Am I wrong in this?
Is it, therefore, still possible to claim Child Benefit in 2013/2014 (and beyond) regardless of whether your income is greater than £60,000 and be prepared to pay it all back under self assessment but then claim Child Benefit again in the next tax year? (This seems to be what Basil is implying.)
If so, for those with children, this is a fantastic way to get an interest free loan out of the government year after year.
Moreover, Ding Dong's client could continue to claim Child Benefit and thus still qualify for the (non-repayable) WPA but be prepared to pay back the Child Benefit under self assessment but, next year, to claim the Child Benefit again anyway?
Thanks Basil, that's very interesting.
I usually leave the claiming of benefits to the client then only ask them when tax return time comes whether they have claimed any so that, where possible, income levels can be set so as not to afftect their entitlement and any recoupment calculated accordingly.
This leads me to believe that a more proactive approach needs to be taken.
When I was training and preparing for PE1 I remember sitting in a railway carriage with the audit team and the senior partner on our way to the first day of an audit. The partner asked us how our studies were going and I said that it was puzzling that state benefits were not part of the syllabus.
The partner looked at me and said words to the effect of "You're training to be an accountant lad. You won't be dealing with anyone on benefits."
How times change, eh?