HM Revenue and Customs (HMRC) is urging high-income Child Benefit parents who have not yet submitted their tax return to take action now, or face penalties.
Parents with incomes above £50,000 who continued to receive Child Benefit after 7 January 2013 have to pay a tax charge. This is based on their incomes and how much Child Benefit they received in the 2012-13 tax year.
Those who have already registered must now file a return before 31 January. Those who have neither registered nor opted out must register for Self Assessment Online now, to enable them to send an online return by the 31 January deadline. This is because online registration can take up to seven working days to complete, as HMRC has to send an Activation Code in the post.
The deadline for paying any tax owed for 2012-13 also falls on 31 January.
HMRC Chief Executive Lin Homer said:
“The registration process is easy. We know that many parents are newcomers to Self Assessment, so it is really important they register and file online to avoid getting a penalty.”
To register for Self Assessment online, visit www.hmrc.gov.uk/signup and follow the on-screen instructions. Taxpayers will immediately get a User ID and, once they’ve received an Activation Code, they can activate their account. They can then complete their tax return online.
A short You Tube question and answer video with HMRC’s Ruth Owen can be viewed at http://youtu.be/WmDDnSAUANc
Around 350,000 people with higher incomes opted out of receiving Child Benefit by 7 January 2013, and these people do not need to complete a return.
For general help and advice on completing a return, visit www.hmrc.gov.uk/sa or call the Self Assessment helpline on 0300 200 3310 (open 8.00am to 8.00pm, Monday to Friday, and from 8.00am to 4.00pm on Saturdays).
Notes for editors
1. HMRC wrote to around two million higher rate taxpayers in August, including those affected by recent changes to Child Benefit. The letter reminded them that if their income is over £50,000, and they or their partner received Child Benefit in 2012-13, they will need to complete a Self Assessment tax return for the 2012-13 tax year.
2. The High Income Child Benefit Charge came into effect on 7 January 2013. Taxpayers are liable to pay the tax charge if:
- they have an individual income of over £50,000 a year; and
- either they or their partner received any Child Benefit payments from 7 January to 5 April 2013; and
- their income for the tax year is higher than their partner’s (as the partner with the higher income is liable to pay the charge if both partners have income over £50,000).
3. The Self Assessment online return includes boxes that ask for the amount of Child Benefit received from 7 January to 5 April 2013 and the number of children. The amount of the charge is calculated automatically. If income is over £60,000 the charge will be equivalent to the amount of Child Benefit received. For incomes between £50,000 and £60,000 parents will pay one per cent of Child Benefit payments for every £100 of their income over £50,000.
4. People can use the calculator at hmrc.gov.uk/childbenefitcharge to check what amount of Child Benefit they need to include in their return. As an example, the amount of Child Benefit for the period from 7 January to 5 April 2013 is:
- £263 for one child
- £438 for two children
- £612 for three children.
5. The penalties for late Self Assessment returns are:
- an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time;
- after three months, additional daily penalties of £10 per day, up to a maximum of £900;
- after six months, a further penalty of five per cent of the tax due or £300, whichever is greater; and
- after 12 months, another five per cent or £300 charge, whichever is greater.
6. There are also additional penalties for paying late of five per cent of the tax unpaid at: 30 days; six months; and 12 months.
7. Follow HMRC on Twitter @HMRCgovuk
8. Images are available on HMRC’s flickr site www.flickr.com/hmrcgovuk