What is Form CH995?
The High Income Child Benefit Charge (HICBC) is a tax charge that applies to individuals who receive child benefits and have an income above a certain threshold. If you are affected by the HICBC and have engaged a tax adviser or accountant to assist you with your tax affairs, you will need to provide them with the necessary authorization to act on your behalf. This is where Form CH995 comes in.
What is a High Income Child Benefit Charge Tax Case?
A High Income Child Benefit Charge (HICBC) tax case in the UK refers to a situation where an individual or a household is subject to the HICBC tax charge due to their income exceeding the threshold set by the UK government. The HICBC was introduced in 2013 as a way to gradually remove child benefit payments from households where at least one parent earns above £50,000 a year. For households where the income is above £60,000, the entire child benefit amount is effectively removed through the charge.
The HICBC is calculated based on the income of the highest earner in the household, regardless of who is actually receiving the child benefit payments. This means that even if one parent earns above the threshold and the other doesn't, the household may still be subject to the charge.
A High Income Child Benefit charge tax case can arise in several situations. For example, a household may not be aware of the HICBC charge and fail to declare their income correctly to HM Revenue and Customs (HMRC). This can result in HMRC issuing a penalty for incorrect or late declaration, as well as a demand for payment of the HICBC charge.
Another situation that may lead to a HICBC tax case is when there are changes in income within a household during the tax year. If one parent receives a pay rise or bonus that takes their income above the threshold, the household may become subject to the charge. Similarly, if one parent loses their job or has a decrease in income, the household may no longer be subject to the charge.
In some cases, a household may seek legal advice and challenge the HICBC tax charge in court. This may happen if they believe that the charge has been unfairly applied or if they believe that their income should be calculated differently. For example, there have been cases where individuals have argued that the charge should be based on their combined income as a household, rather than just the income of the highest earner.
What is Postal CH995?
Form CH995 is a form issued by HM Revenue and Customs (HMRC) in the UK. It is a form of authority that allows a tax adviser or accountant to act on your behalf with regard to your tax affairs, specifically in relation to the HICBC. The form is also referred to as an "authority to access tax information" form.
Why is Form CH995 Necessary for HICBC Issues?
Form CH995 is necessary for HICBC issues because it provides a legal basis for your tax adviser or accountant to act on your behalf. Without this authorization, your adviser or accountant will not be able to access your tax information or communicate with HMRC on your behalf regarding the HICBC.
Who Can Use Form CH995 for HICBC Issues?
Form CH995 can be used by anyone who wishes to authorize a tax adviser or accountant to act on their behalf with regard to HICBC issues. This includes individuals, partnerships, and limited companies. However, the form cannot be used by agents who are already authorized by HMRC, such as those who are part of an accountancy firm.
How to Fill Out Form CH995 for HICBC Issues
Filling out Form CH995 for HICBC issues is similar to filling it out for any other tax issue. The form can be downloaded from the HMRC website or obtained from your tax adviser or accountant. The following are the steps to fill out the form:
Step 1: Personal Details
The first section of the form requires you to provide your personal details, including your name, address, date of birth, and National Insurance number.
Step 2: Adviser or Accountant Details
In this section, you will need to provide the name and address of your tax adviser or accountant. You will also need to specify that you are authorizing them to act on your behalf with regard to the HICBC.
Step 3: Authorization
The final section of the form is where you will sign and date the authorization. By signing the form, you are giving your tax adviser or accountant the authority to act on your behalf specifically with regard to the HICBC.
After completing the form, you should send it to the HMRC office that deals with your HICBC issues. The address can be found on the form or obtained from your tax adviser or accountant. You can also Authorize a tax adviser online by using Government Gateway. Or you can fill it out online and get a printout of this.
To Which Address Should We Send Filled Form CH995?
If you want to send Form CH995 by post to allow a tax adviser or accountant to act on your behalf for High Income Child Benefit Charge (HICBC) issues in the UK, you should send it to the following address:
HM Revenue and Customs
Child Benefit Office
PO Box 1
Newcastle Upon Tyne
NE88 1AA
United Kingdom
It is important to ensure that you have completed the form accurately and provided all the required information before sending it to HMRC. You should also keep a copy of the completed form for your records.
Once HMRC has received your form, they will update their records to show that your tax adviser or accountant is authorized to act on your behalf for HICBC issues. Your tax adviser or accountant will then be able to correspond with HMRC, provide information, and deal with any issues related to your HICBC.
Benefits of Using Form CH995 for HICBC Issues
Using Form CH995 for HICBC issues has several benefits. These include:
Convenience
Form CH995 allows you to authorize your tax adviser or accountant to act on your behalf without the need for face-to-face meetings or lengthy discussions with HMRC.
Expert Advice
By using a tax adviser or accountant, you can benefit from their expertise and experience in dealing with the HICBC. This can help to ensure that you are fully compliant with the rules and regulations surrounding the charge.
Time-Saving
By using Postal Form CH995, you can save time by delegating your HICBC issues to your tax adviser or accountant, who will be able to handle them on your behalf.
Peace of Mind
By authorizing a tax adviser or accountant to act on your behalf for HICBC issues, you can have peace of mind knowing that your tax affairs are in capable hands.
Why Should We Hire a Tax Accountant to Act On Our Behalf for High Income Child Benefit Charge?
Hiring a tax accountant or adviser to act on your behalf for High Income Child Benefit Charge (HICBC) issues in the UK can be beneficial for several reasons. Here are some of the key reasons why you should consider hiring a professional:
1. Expertise and Knowledge: Tax accountants and advisers are experts in tax laws and regulations. They have extensive knowledge and experience in dealing with complex tax issues, including HICBC. By hiring a professional, you can be assured that they have the expertise and knowledge to navigate the complexities of the HICBC system, ensuring that you are compliant with tax laws and regulations.
2. Minimizing Tax Liability: Tax accountants and advisers can help you minimize your tax liability by identifying tax deductions and credits that you may be eligible for. They can also advise you on tax planning strategies that can help you reduce your tax liability in the future.
3. Accuracy and Compliance: Filing your taxes accurately and on time is crucial to avoid penalties and interest charges. Tax accountants and advisers can help ensure that your tax returns are filed accurately and on time, reducing the risk of penalties and interest charges.
4. Communication with HMRC: If you receive a notice from HM Revenue and Customs (HMRC) regarding HICBC, a tax accountant or adviser can act on your behalf in communicating with HMRC. They can help you understand the notice, respond to HMRC on your behalf, and provide the necessary documentation to support your case.
5. Legal Representation: In some cases, you may need legal representation in challenging a HICBC tax charge or penalty. A tax accountant or adviser can work with legal professionals on your behalf, ensuring that you have the necessary legal representation to fight your case effectively.
Conclusion
The High Income Child Benefit Charge can be a complex tax charge that can be difficult to navigate without the help of an expert. By using Postal Form CH995 to authorize a tax adviser or accountant to act on your behalf, you can benefit from their professional knowledge and experience.