Time is running out for higher income parents to register for Self Assessment

Parents who stopped receiving Child Benefit payments before 7 January 2013 do not need to take any action. However, parents who did not stop their payments until after 7 January or who are continuing to receive Child Benefit, and with income over £50,000, must register for Self Assessment for the 2012-13 tax year by 5 October 2013. This will enable them to declare the Child Benefit received, pay the tax charge on time and avoid penalties for failure to notify HMRC on time.

Letters are currently being sent to around two million higher rate taxpayers, including those affected by recent changes to Child Benefit. These will remind them they must declare any additional income or register now with HMRC for Self Assessment, in order to pay the High Income Child Benefit Charge, if they have not already done so.

HMRC’s Chief Executive, Lin Homer, said:

“HMRC wants to ensure that people avoid possible penalties and pay the right amount of tax. If you had any additional income last year, or have been affected by the changes to Child Benefit, you have until 5 October to register for Self Assessment.”

Over 400,000 people with higher incomes have already opted out of receiving Child Benefit payments. Those who did not receive any payments relating to the period after 7 January do not need to register for Self Assessment.  

People who fail to register could face a penalty of up to 100 per cent of the tax due, depending on the circumstances. They might be able to come out of Self Assessment in future years if they (or their partner if they are the Child Benefit recipient) choose to opt out of receiving Child Benefit and avoid incurring the tax charge. People who want to opt out should go to http://www.hmrc.gov.uk/childbenefitcharge

More information on whether people need to register for Self Assessment can be found at: http://www.hmrc.gov.uk/yourtaxreturn

Notes for Editors

1.  The High Income Child Benefit Charge came into effect on 7 January 2013. Parents are liable to pay the tax charge if all of the following statements apply, or applied to them in the 2012-13 tax year:

- they have an individual income of over £50,000 a year, and

- either they or their partner received Child Benefit payments relating to the period 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. 

2.  To check whether the tax charge applies and to register, parents should go to http://www.hmrc.gov.uk/childbenefitcharge

3.  HMRC may charge a penalty if people send a return or document that isn't accurate, or fail to notify HMRC about a tax liability. More can be found out here - http://www.hmrc.gov.uk/dealingwith/penalties-hmrc-charge.htm and http://www.hmrc.gov.uk/compliance/cc-fs11.pdf

4.  Follow HMRC on Twitter @HMRCgovuk

5.  HMRC’s flickr channel www.flickr.com/hmrcgovuk