Child Benefit

[ncompass]

My wife are I are both UK Nationals, we've taken our 4 children abroad for a few years, we were getting Child Benefit until January 2010.

In March 2010 we noticed that it has stopped and were told that we had to fill out an enquiry form.

In November 2010 we eventually found out that the UK CB office was waiting for the Italian Tax office to confirm we were not claiming twice - this seemed fair enough.

In March, April and May - we have made more effort, the CB Office have basically said we're subject to Italian Law and should claim in Italy. They are also trying to reclaim almost 2 years worth of CB.

Now for the tricky bit. We both work for a UK Ltd. Company Paying UK NIC's & PAYE, etc. We work on the Internet and earn all our money in the UK, we have no Italian Clients or business or income. We cannot become 'residents' in Italy, because we only have a holiday rental contract, we own no property.

On the HMRC website:
"If you move abroad permanently
If you're going abroad permanently, or expect to be away for more than 52 weeks, you won't qualify for Child Benefit unless both of the following apply:

• you are moving to an EEA country or Switzerland
  you are paying UK NICs or receiving a UK National Insurance-related benefit"

It is clear that we fulfil both criteria.

Now my work is 100% Internet Based, All clients are UK Based, All Income is derived from the UK, my question is: Should I be getting UK Child Benefit?

Does anyone have any experience of this. How does the Tax Office define your place of Work, where you are physically located, or where the income is created.

Any comments are welcome.

[italiarsenal]

We had a similar problem, I am self employed in the uk and have moved to Italy, in the process of finalising residency. We met the same criteria as pay tax and NIC in the UK so felt appropriate to claim from the UK under the guidelines. To cut a v long story short, on two appeals it eventually turned out that they didn't have me registered as self employed in the UK. Once that was clarified payments recommenced. The long version is much more frustrating, esp as we'd been very clear, up front and honest about our situation. The problem is even though the criteria is clear they still make desisions based on individual cases. I don't know if it helps you much, took about 6 months of back and forth before we got anywhere.

[ncompass]

So I have had my accountant look at this and he was encouraging as well. I think where we have a problem is that the Child Benefit Office are saying - we do not 'need' to pay NIC's as we are not living in the UK. Therefore we do not meet the criteria specified on the HMRC website.

However, as I am a director of a UK company I have to by Law pay NIC's in the UK. (please correct me if that is wrong).

The problem now is that Child benefit is in my wife's name not mine, and we do know know if they will look at us in a 'combined light' or indeed in just my Wife's criteria, where perhaps they will apply the 'does not need to pay NIC's' comes into play.

Thank you for your feedback, did they pay the missed payments or did they just restart CB?

[italiarsenal]

They repaid it as well, our situation was the same which didn't help, benefit in wife's name and me paying nic. The problem was for a long time that they wouldn't give us the grounds for not paying so we couldn't help correct the problem. It was only when we formally complained that it got resolved. I didn't know NIC was optional either, was always given the impression they were rather keen I paid it!

[ncompass]

We haven't formally complained yet - but we have fully explained out situation so hopefully it just a question it all getting to the right person. I shall keep this forum posted when I have news. I cannot thank you enough for sharing what you have, if anyone else has experience that would be really useful.