The OTS has published a review paper on the high income child benefit charge (HICBC) and its interaction with child benefit claims and National Insurance credits. In its 2019 Life events review’ report, the OTS made the following key recommendations:
Make clear that not claiming child benefit can lead to loss of national insurance entitlements.
Restore NI credits to those who lost out through not claiming child benefit.
Ease the process of enabling children of those who have not claimed child benefit to receive their NI number.
Noting HMRC’s limited progress in these three areas during the pandemic, the review highlights a number of points to be addressed:
Although the child benefit claim form now explains the importance of making a claim even where the individual chooses not to receive the payments (to preserve entitlement to NI credits), the language used around ‘making a claim’ remains confusing.
No progress has been made on recommendation 2; many families could be missing out on NI credits.
Making the position around the issuing of NI numbers clear to those completing the child benefit claim form would help address recommendation 3.
Raising taxpayer awareness has become a particular concern as more people have found themselves within the HICBC, with the £50,000 threshold having remained static since its introduction in 2013.
Guidance on the definition of ‘adjusted new income’ needs to be clear and comprehensive.
The HICBC should be considered in the design of the single customer account to make sure the charge can be reported and paid without the need to file a self-assessment tax return.
The OTS has published a review paper on the high income child benefit charge (HICBC) and its interaction with child benefit claims and National Insurance credits. In its 2019 Life events review’ report, the OTS made the following key recommendations:
Make clear that not claiming child benefit can lead to loss of national insurance entitlements.
Restore NI credits to those who lost out through not claiming child benefit.
Ease the process of enabling children of those who have not claimed child benefit to receive their NI number.
Noting HMRC’s limited progress in these three areas during the pandemic, the review highlights a number of points to be addressed:
Although the child benefit claim form now explains the importance of making a claim even where the individual chooses not to receive the payments (to preserve entitlement to NI credits), the language used around ‘making a claim’ remains confusing.
No progress has been made on recommendation 2; many families could be missing out on NI credits.
Making the position around the issuing of NI numbers clear to those completing the child benefit claim form would help address recommendation 3.
Raising taxpayer awareness has become a particular concern as more people have found themselves within the HICBC, with the £50,000 threshold having remained static since its introduction in 2013.
Guidance on the definition of ‘adjusted new income’ needs to be clear and comprehensive.
The HICBC should be considered in the design of the single customer account to make sure the charge can be reported and paid without the need to file a self-assessment tax return.
