Chartered Accountants in Dudley
Accountants Dudley

Higher earning parents get tax reminder

Chartered Accountants in Dudley

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Chartered Accountants in Dudley

Higher earning parents who have been claiming child benefit since January this year have until 5 October to register for tax self assessment to avoid any High Income Child Benefit Charge penalties.

HM Revenue and Customs (HMRC) said on 10 August that it would be writing to around two million higher rate taxpayers to remind them that if their income is more than £50,000 and they or their partner received child benefit in 2012-13, they need to register for self assessment, if they have not already done so, and to complete a self assessment tax return for the 2012-13 tax year.

More than 390,000 people with higher incomes have already opted out of receiving child benefit following the introduction of the High Income Child Benefit Charge on 7 January this year, and they need take no further action. Taxpayers are liable to pay the tax charge if in the 2012-13 tax year:

  • they had an individual income of over £50,000 a year
  • they or their partner received any child benefit payments after 7 January 2013
  • and their income for the tax year is higher than their partner’s. The partner with the higher income is liable to pay the charge if both partners have income over £50,000.

The charge reduces child benefit by one per cent for every £100 of income between £50,000 and £60,000. Taxpayers with income above £60,000 lose all their child benefit.

If the charge applies, registering for self assessment by 5 October 2013 will enable the taxpayer to declare child benefit received, pay the tax charge due and avoid any penalties. Once registered, they will need to file a paper tax return by 31 October 2013 or an online return by 31 January 2014 to avoid fines and other financial penalties.

Link: HMRC guidance on the High Income Child Benefit Charge

Chartered Accountants in Dudley
Chartered Accountants in Dudley
Chartered Accountants in Dudley

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Chartered Accountants in Dudley