High income child benefit charge – HMRC errors

If you have individual income in excess of £50,000, you may have to pay the ‘high income child benefit charge’. This depends on whether or not you or your partner is in receipt of child benefit.

If you’ve received correspondence from HMRC asking you to amend your tax return for an overpayment of child benefit, don’t be too hasty to act.

If you’re affected by the charge, you have 3 options:

  1. Opt out of receiving Child Benefit
  2. Opt out of receiving Child Benefit but receive National Insurance credits towards your pension
  3. Continue to receive Child Benefit and pay any tax after the end of the tax year

HMRC errors

We’ve had several cases of HMRC asking parent/clients to amend their tax returns for the high income child benefit charge as they were told they owed tax on overpaid Child Benefit.

What HMRC failed to do, however, was check if the higher earning partner had adjusted their tax return for the ‘charge’. In fact, the higher earner had correctly adjusted their tax return and no tax was owed by either party in this respect.

We are concerned that taxpayer parents will receive incorrect requests from HMRC which could result in paying too much tax.

If you would like help understanding your position, please contact Helen Sewell on 01527 558539 or [email protected] for advice..