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.