Thousands of middle-income families face child benefit probe as taxman goes after people who ‘unwittingly’ overclaimed £21-a-week handout
Tens of thousands of middle-income UK families who have ‘unwittingly’ overclaimed child benefit face being investigated by the taxman – and risk huge fines if they fail to repay.
MPs last week gave HM Revenue & 세관 (£ 100million Jack Grealish의) extraordinary powers to probe the financial records of 170,000 households who it suspects wrongly claimed the benefit.
하나, observers have claimed that the system is so complicated that many parents simply did not know they had overclaimed.
Under changes introduced in 2013, the full benefit – £21 a week for a first child and £14 a week for further children – is reduced for households where one earner makes more than £50,000.
The child benefit tapers until the point where households with an earner on £60,000 get nothing. But families continue receiving the benefit regardless of their income unless they notify HMRC in a tax return then repay it.
Many households have insisted that they did not repay it because they were unaware that they had to.
Tens of thousands of UK parents who ‘unwittingly’ overclaimed child benefit face being investigated by the taxman – and risk huge fines if they fail to repay (스톡 이미지)
How the child benefit system works
Child Benefit pays £21.15 per week for the eldest or only child and £14 for all additional children.
These rates will rise by 3.1 per cent from April 2022 to £21.80 and £14.45 respectively.
Only one person can get Child Benefit for a child. But household income for both partners is taken into account.
If your or your partner’s individual income is over £50,000, you get taxed on Child Benefit and receive a lower amount. Once you or your partner earn £60,000 you lose all of your benefit through tax.
Those who fail to notify HMRC that they owe the tax could receive fines of up to 30 per cent on top of what they owe.
있었다 46,738 penalties in 2015-16, dropping to 19,329 에 2016-17 and a similar 20,281 에 2017-18, before plummeting to 4,742 에 2018-19 그리고 그냥 1,217 에 2019-20.
HMRC will now pursue these families back to 2013 amid fears it could lose a test case on the issue which could cost it millions of pounds.
The taxman reduced the checks during the pandemic while staff were redeployed on Covid-19 schemes, but is now resuming its work checking if parents in receipt of Child Benefit should be paying tax.
Those who fail to tell HMRC that they owe the tax could receive fines of up to 30 per cent on top of what they owe.
Compliance checks on claims fell from a high of 125,594 에 2019-20 그냥 45,553 에 2020-21, after they had doubled in the year before the pandemic.
Parents earning more than £50,000 must pay the High Income Child Benefit Charge if they get the benefit. The tax charge is paid at a rate of 1 per cent of the benefit for every £100 earned over this sum.
The taxman will issue so-called ‘discovery assessments’ to workers it believes should pay back child benefit. A discovery assessment can be issued if HMRC officials find ‘careless or deliberate’ behaviour.
In cases where an error has been caused ‘carelessly’, HMRC has the power to trawl through six years of financial records. It can investigate 20 years of financial records if families are found to have acted ‘deliberately’.
The powers being used by the taxman are normally reserved to investigate the worst tax offences.
Sean McCann, chartered financial planner at NFU Mutual, told The Sun: ‘HMRC dramatically increased the number of checks they made before the pandemic when over 120,000 families were contacted in a single tax year, but as staff were redeployed to deal with Covid schemes, that figure collapsed.
‘Families who didn’t receive reminder letters last year shouldn’t assume the tax isn’t owed.’
그는 덧붙였다: ‘If you have income over £50,000 and receive child benefit or live with a partner who does, you may need to repay it.’
HMRC is appealing a decision by the Upper Tax Tribunal which found in favour of the taxpayers.
MPs last week gave HM Revenue & 세관 (£ 100million Jack Grealish의) powers to probe the financial records of 170,000 households who it suspects wrongly claimed the benefit
If it loses it will be forced to pay back £2million and could face claims from nearly 170,000 other claimants it is investigating for ‘overclaiming’ child benefit between 2013 과 2019.
Lawyers representing 400 claimants claim that issuing discovery assessments for employees paid through PAYE is unlawful.
James Austen, a barrister at Collyer Bristow, which is bringing the legal case against HMRC, 말했다: ‘In this case there was no tax avoidance and the taxpayers being penalised by this retrospective move were typically oblivious of their responsibilities.’
An HMRC spokesman said: ‘The measure will ensure those liable for these tax charges are treated in a fair and consistent way, and that individuals who do not notify and report their liability to these charges cannot gain an unfair advantage over the majority who follow the rules.
‘The measure does not create new liabilities or obligations for taxpayers, and confirms the longstanding and widely accepted legal position in place before recent tribunal decisions.’