ListenToTaxman.com

UK PAYE Tax Calculator / Salary Calculator

The number 1 free UK salary calculator tax calculator since 1998. Calculate salary, national insurance, HMRC tax and net pay

Fears that many parents to be hit by fines due to Child Benefit

Fears are growing that many middle-income families will leave it too late to register for Self Assessment in order to repay the taxes owing on their child benefit. Registering can take 10 days, maybe more, at busy times.

With the January 31st self assessment deadline looming, this year sees a new group join the Self Assessment Return Club- middle-income parents. The new High Income Child Benefit Charge, introduced last year, has meant that any parent earning over £50,000 net a year, will have their child benefit taxed. The means by which this tax is collected is self assessment. Nearly half a million parents have already opted out of receiving child benefit in order to avoid having to make a self assessment return. However, there are growing fears that many of the 500,000 parents remaining in receipt of the payment and earning above the income threshold, have not yet registered for self assessment.

In order to complete an online self assessment return each individual must register with HMRC. This involves a code being sent out by HMRC in the post which can take up to 10 days, possibly more if many leave it to the last minute. Making a late self assessment return, by even one day will cost parents £100, regardless of whether any tax is owing or not.

Parents in receipt of child benefit during the 2012/13 tax year and earning over the £50,000 net figure will need to complete a Self Assessment tax return for 2012/13. This also applies to parents who opted out of child benefit payments during the year, but did receive a payment during the tax year. HMRC have attempted to contact everyone liable to make a return, but just because you have not received notification from HMRC does not mean you are not liable to make a return.

Parents in receipt of child benefit are being urged to accurately assess their earnings for 2012/13 to make sure they are not liable to pay tax on their child benefit. Fines for late filing of self assesment tax returns and payment of tax owing are immediate and accumulate very quiclkly. See our breakdown here to scare yourself into action!

Anyone who needs to make a self assessment return and has not already registered with HMRC is being urged to do so as soon as possible. HMRC have details on how to regsiter here.

For help on completing your self assessment return see our Self Assessment Guide.

Our article may also be of interest Tips on how to reduce the amount of Child Benefit you may lose.

 

This article was published in our News section on 08/01/2014.

Some Guides you may be interested in

  • A guide to expenses for Contractors As a contractor, working through your own limited company, one of the main benefits available to you is the ability to claim business expenses. Claiming expenses correctly can reduce your tax bill, it’s a vital part of running your company tax efficiently.
  • 7 reasons you could have the wrong Tax Code Your Tax Code tells your employer how much tax to take off your pay. What if your code is wrong? In the past 4 years, 1 in 3 employed taxpayers have been overcharged tax because their employer has received the wrong code from HMRC!
  • IR35 - A contractors guide for 2018/19 IR35 is a complex piece of legislation used to distinguish between true self-employed contractors and employees. As a contractor, it’s important that you have an awareness and understanding of IR35 to ensure that you’re paying the correct amount of tax and National Insurance. Here’s a definitive introduction to IR35 to help you understand how it works.
  • Making Tax Digital for Landlords There's every chance that you are not yet aware of Making Tax Digital (MTD). However, if you are a landlord with rental income - (that's income, not profit) – greater than £10,000 annually then you should be. MTD is the biggest shake up to the UK tax system since the advent of Self-Assessment in the 1990s. And it affects you, from April 2020 at least.
  • Contractors - LTD Company v Umbrella? What are the benefits for contractors of setting up a Limited Company vs Umbrella Company? Read our guide, see how much you could take home in each setup.
  • Capital Gains Tax on Rental Property (Buy-to-let) 2018 Whether it's primary residence relief, letting relief, or even the costs of improvement works, our resident landlord and property tax editor, Iain King has the information you need to reduce your CGT liability.
  • 14 Reasons why you may be due a tax refund Almost 1 in 3 PAYE employees may have paid too much tax. We have put together a list of 14 reasons why you might be owed money by HMRC.
  • Avoid paying too much tax on rental income Our resident landlord tax expert, Iain Rankin, has put together a great guide on how to reduce the amount of tax paid on income from your rental property
  • Buy-to-let Landlords - Most Common Tax Mistakes Many new or aspiring landlords will often read, with alarm, about a campaign or some form of crackdown by HMRC on buy-to-let landlords, accompanied by warnings that landlords could potentially face tax bills of “thousands of pounds” plus interest, surcharges and penalties. What is it though that HMRC are actually looking for? Here’s an overview of the main categories of mistakes.
  • Landlord Tax Guide In our detailed Landlord Tax Guide, our experts tell you what you can claim in expenses and a comprehensive insight into HMRC tax rules

More from our News section