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HRMC criticised for causing confusion


HMRC have been heavily criticised for causing confusion by sending out “incorrect” letters to higher rate taxpayers who they suspect have not repaid their child benefits.

If a parent in a two child family earns over £50,000, they are required to payback £1,770 in child benefit payments. Additionally, if a parent earns over £60,000, then all child benefits for that tax year need to be repaid.

This rule applies to all households where one of the parents are paying the higher tax-rate, and in the case of both parents earning over £50,000, the highest earning parent would be assessed.

The taxman sent out over 30,000 letters to high earning parents, claiming that they have failed to include their child benefits on last years self-assessment tax return form.

However, it has since been suggested by accountancy firm UHY Hacker Young that the HMRC took a “scattergun approach” and sent incorrect letters out, as they failed to check if an individual’s partner had already made the necessary payment.

Unfairly targeted

Mike Crellin, tax director at UHY Hacker Young said a “significant number” of his clients had been unfairly targeted, as they had been told they owe money, despite having fully paid their taxes.

He said: "We have had lots of queries about these letters from concerned taxpayers, who thought they had their affairs in order but are now worried that they have made an expensive mistake". However, Mr Crellin continued to insist that in the majority of cases he’s come across, his clients had actually correctly completed their tax return.

Despite fierce criticism, a spokesman for HMRC defended their mailing. He said that the letters were designed to “help taxpayers get their returns right by reminding customers who file under self assessment of the importance of including the high income child benefit charge on their tax return."

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