Dad devastated by £5,000 bill for child benefit error is told he can’t appeal

A dad-of-two has explained that he feels cornered by HMRC after it gave him misleading information which meant that he forfeited his legal right to appeal a child benefit error.

Andrew Cochran, an IT engineer, has two children, aged nine and five, with his wife, Catherine, a charity worker.

The couple have been claiming child benefit since their eldest was born in 2012.

However, last year, Andrew received a letter which shocked him to his core.

Andrew, from Wiltshire, said: “One morning a letter arrived from HMRC threatening legal action.

“It said we’d over-claimed child benefit by £5,023.25 and that we were being hit with a repayment bill plus penalties and late charges.

“We were completely stunned – it made no sense, it felt like they were accusing us of tricking the system,” Andrew told The Mirror.

Worried, Andrew called HMRC that day and cancelled his child benefit payments.

It later appeared that the couple had fallen into the High Income Child Benefit Charge trap.

Andrew didn’t know that the rules had changed between the birth of his first and second children

HMRC told the couple that the charge was because he had earned over £50,000 a year since 2017.

The rules state that this means he had to pay them back.

Andrew commented: “They said they warned us about this in a leaflet handed to us inside a goodie bag at the hospital when my daughter was born in 2016.”

Until 2013, child benefit could be claimed by all parents in England regardless of their earnings.

But, in 2013, the government changed the rules to state that anyone earning more than £50,001 a year would have to pay back 1% of every £100 they earned in the form of a self-assessment at the end of each tax year.

Like hundreds of parents in the UK Andrew was not aware of this and tried to appeal the charge.

He was told by a tribunal that another dad was already disputing a case in court and the judge’s decision on that case would determine whether he had to repay the costs of the first year.

The letter shocked the whole family
The letter shocked the whole family

Andrew said: “I spoke to HMRC’s compliance team about the second and third years and explained that I genuinely did not know about HICBC and wanted to appeal it.

“They told me to submit a self-assessment so I paid for a tax advisor and submitted it along with an appeal to HMRC.

“I then got a response saying that by submitting a self-assessment, I forfeited my rights to appeal it,” Andrew said.

“The tax tribunal even said I have no legal precedence.”

He added: “It’s especially frustrating because I was not aware of HICBC. I never knew we should not have been receiving child benefits.

“HMRC knew exactly how much I was earning through PAYE so why didn’t they tell me?” .

An HMRC spokesperson told the Daily Star: “We’re continuing to use a wide array of channels to reach those who may be liable to pay the High Income Child Benefit Charge and have improved our awareness work after feedback from customers and stakeholders.

“This includes putting information about the charge in packs made available to new parents which tell them how to claim child benefit and by using social media, GOV.UK and third parties such as family websites.

“If anyone wishes to find out more about the charge, especially whether they are liable to pay it, we encourage them to visit the HICBC pages on GOV.UK or call our Child Benefit helpline on 0300 200 3100.”

Explaining why it took four years to contact Mr Cochrane despite knowing his income, HMRC told the Mirror: “It is an individual’s responsibility to tell HMRC when they are liable to pay the tax charge.”

HMRC said a person will not be liable to penalties if they have a reasonable excuse for the failure.

It told the Mirror that a reasonable excuse is something that stopped someone from meeting a tax obligation that they took appropriate care to meet.

Sean McCann, Chartered at NFU Mutual, said: “It’s crucial families who don’t want the hassle of repaying child benefit still register a claim before opting out of receiving payment. This ensures that a non-working parent receives a national insurance credit, helping to protect their state pension entitlement.

“It’s vital that the claim is made by the non-working payment, rather than the high-earning partner. Families with non-working parents failing to register for child benefit could be counting the cost many years in the future.”

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