Self Assessment - High Income Child Benefit Tax

Best options for possible missed HICBT payments

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I have never had to submit Self Assessment before, as all my income is via PAYE and under personal allowance threshold. 
During the last tax year, I received rental income for 3 months and as I have no experience with SA I seeked help from accountants to complete the SA. This is also the first time I have registered for SA. This was completed and submitted. 

My partner claims Child Benefit and has claimed for over 10 years now. She receives the payments straight into her account. She had no other income.

I was always under the impression that this was taxed from source. I need to complete another SA for this tax year and decided to do this myself online. I am surprised to find out I actually owe payments for HICBT. This had me worried as I have exceeded £50k threshold for the last 3 financial years. 

What would be the best course of action? I genuinely have no intention of not paying as I was not aware until now that I owe payments. I am very surprised this was not mentioned by the accountants.

I also checked my HMRC account on the government gateway but cannot find any information on Child Benefits that I am claiming. 

Replies (18)

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Danny Kent
By Viciuno
09th May 2024 09:30

How can your income be >£50k but also be under the personal allowance threshold?

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By SXGuy
09th May 2024 10:00

Yeah sorry, you can't both have income below the personal allowance and owe tax on child benefit.

Suggest you re think your question.

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By HK88
09th May 2024 10:09

Sorry meant to say my income was below £50k. However for the last 3 years it’s exceeded that.

Basically my fault for being unaware I needed to do Self Assessment and only found out now.
Surprised the accountant I paid for last year to complete my first SA did not pick this up. However not going to challenge that now. I just want to make this right.

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Replying to HK88:
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By Paul Crowley
09th May 2024 11:03

He should have asked the question.
But he could not know about the child benefit claimed unless you told him about it.

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Replying to Paul Crowley:
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By HK88
09th May 2024 11:14

The accountant was assisting with both mine and my partner’s Self Assessment and we did declare this. Not too sure why this was not picked up. We do not want to pursue this as it was a costly mistake. Paid £700 for the pleasure.

I just want to know how to make this right. Spoke to advisor via webchat and he said first contact Child Benefit and then Self Assessment. Not too sure how to proceed. I really need guidance to ensure everything is made right.

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Replying to HK88:
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By Paul Crowley
09th May 2024 12:31

If your partner has no income, why was a tax return needed.
Every time you post you add details that seem to conflict with your original posting.
Even the comments on the webchat do not make sense.
If that was meant to be an HMRC advisor then I genuinely do not believe even the current useless HMRC advisors could give such bad information, unless the information they received was equally bad.

The answer is simple. You need to submit correct tax returns. for all years that your income exceeded £50K. The child benefit rates can easily be searched through Google or by looking at your partner's bank statements.
Sort it quickly to avoid penalties. If HMRC prompt you, then you have not made an unprompted disclosure.

£300 (£250 plus VAT) is a very basic start price for a simple tax return.
Hence £700 for two was not really a costly mistake.
How the heck you could think that child benefit or any other benefit would be paid with tax already deducted is beyond me. Ten seconds to Google that and get a sensible answer.

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Replying to Paul Crowley:
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By HK88
09th May 2024 17:37

Sorry my mind was in a mess when I initially posted. My partner had no other income, but she started receiving rental income in 22/23 hence why both myself and my partner approached the accountant for assistance in completing our Self Assessments.
I initially received the rental income for first few months then legally transferred the rental income to my partner.

Yes, it was my mistake not to have read the form carefully before instructing the accountant to submit. However I genuinely was not aware of High Income Child Benefit Tax at that point.

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Replying to HK88:
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By Paul Crowley
09th May 2024 12:43

'The accountant was assisting with both mine and my partner’s Self Assessment and we did declare this.'
This does not make sense.

If you did not know about HICB then how could you declare it?
Did you check the tax returns and the tax calculations?
If child benefit was taxed at source, then it needed to be declared on the tax return.

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Replying to HK88:
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By FactChecker
09th May 2024 16:20

No idea who this 'advisor' worked for, but either you've not understood what they said or they know not what they are saying!

The CB people have no interest in how much or little Tax you pay ... so the only usual reasons to contact them are to start or cease your claim. But there IS one other reason (which may well apply to you) - to ask that your claim is maintained (so that your spouse's entitlement to NI credits is retained) BUT that you wish to stop receiving the claimed benefits (and so avoid future extra tax).
I'm not saying you should do that ... just that it's one of the many aspects that an adviser should take into account when reviewing your options.

However it's the past that you need to sort out urgently (preferably before HMRC notice), so finding yourself an accountant for proper advice should be your top priority.

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Replying to FactChecker:
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By HK88
09th May 2024 17:31

Thanks I will definitely contact HMRC self assessment to get this sorted ASAP. 22/23 tax year should be ok, and I believe I am still in the window for corrections for 21/22. However for 20/21 I may need to write to HMRC by post.

I am not sure if I can afford to pay all in one go, so will get to ask for payment plan.

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Replying to HK88:
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By Paul Crowley
09th May 2024 20:33

Wrong. Ye April 22 needed to be amended by 31 Jan 2024

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Replying to Paul Crowley:
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By HK88
09th May 2024 20:44

Yes you are right.
23/24 is within current window which I need to submit by Jam 2025.
I can amend 22/23.
It’s 21/22 that I need to write a letter to HMRC to amend.

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By JustAnotherUser
09th May 2024 15:42

"The accountant was assisting with both mine and my partner’s Self Assessment and we did declare this."

"She had no other income."

This has more twists than an M. Night Shyamalan movie.... get... an.... accountant..... again.

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Johny Fartpants Picture
By johnny fartpants
09th May 2024 17:19

Hi HK88. From the information given which, as others have said, is a bit contradictory, you or your tax advisor needs to:

1. Amend the SATR for the years ended April 5th 2023 & April 5th 2024 to include the amount of child benefits received

2. For earlier years, you are too late to amend the returns (if indeed you even submitted any returns) and therefore need to write to HMRC advising of your taxable income and child benefits received in the year. The address is:

SA
HMRC
BX9 1AS

If you don't know how much child benefit you received, there is a handy online tool to help you:

https://www.gov.uk/child-benefit-tax-calculator

You may also need to pay any High Income Benefit Charges owed to HMRC. How much you owe will depend upon how high your taxable income is and how much child benefit has been received.

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Replying to johnny fartpants:
Johny Fartpants Picture
By johnny fartpants
09th May 2024 17:20

Probably!

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Replying to johnny fartpants:
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By HK88
09th May 2024 17:33

Thanks so much for this, it is really helpful.
I might require payment plan for the correction and the past due payment as I cannot afford to pay all in one go.

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JCACE
By jcace
09th May 2024 18:49

Bear in mind that if you pay personal pension contributions or make gift aided donations these can affect the point at which HICBC becomes due. So it's quite possible to earn over £50,000 but not have to pay any HICBC. Bear in mind also that where earnings are between £50K and £60K, the HICBC is tapered... only where income exceeds £60K will it all be payable.

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Replying to jcace:
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By FactChecker
09th May 2024 19:44

... and that those are the thresholds when looking back to past tax years - there are higher ones from 6th April this tax year.

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