Is the higher income child benefit tax charge based on accrued or received payments?

Question

People in the UK who earn over a certain threshold have to repay Child Benefit they or their partner received.

Although Child Benefit is advertised as a weekly rate, it is actually paid ever four weeks. I'm not entirely sure if it's in arrears or a varying mixture of arrears and advance.

For a given tax year, is the charge the payments received during that tax year, or the Child Benefit accrued during that tax year, even if paid in a different tax year?

I think there are a few cases where the two will differ:

• When the rate of benefit goes up, which happened for the first time in a while at the start of the 2020-21 tax year.
• In the occasional cases where there are 53 weeks in the tax year, or you receive 14 (rather than 13 payments) within a tax year.
• At the start and end of eligibility for child benefit for a particular child.

The HMRC guidance somewhat implies that it's based on accrued entitlement:

Child benefit is worked out by a weekly figure and multiplied by the number of weeks you received it, or the tax year if you received it for the whole of the year. The number of weeks in the tax year depends on how many Mondays there are in the tax year.

However as it also talks about "received" rather than accruals or being entitled to it, I find it slightly ambiguous. I suspect that by received they really mean accrued but don't want to use a too technical term.

Answer 1

I'm hesitant to answer because I can't cite any sources for this, but my understanding is that you are supposed to treat it as when it was accrued, rather than when the payment happens to be.

Certainly that is the way I have always calculated it in my tax return and they've never argued with it - the difference would be very small anyway, and would come out in the wash the following year, so if it ever did get queried and you could show that you made the calculation in good faith using a reasonable interpretation I don't think they would argue. If you're worried you could always include a note explaining what you've done in the "Other Information" section at the end.

I am lucky enough these days to be paid enough that I would have to pay it all back anyway, so I stopped claiming it rather than claiming it and then paying it back. Made things much simpler.