HMRC have issued a further reminder to parents who stopped receiving Child Benefit payments after 7 January or who are continuing to receive Child Benefit, and with income over £50,000, to register for Self Assessment for the 2012-13 tax year by 5 October 2013, reports chartered accountant Harris & Co.
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. Those who fail to register could face a penalty of up to 100 per cent of the tax due, depending on the circumstances.
Parents who are registered for Self Assessment 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.
The High Income Child Benefit Charge came into effect on 7 January 2013 and applies to an individual with an income of over £50,000 a year who either received child benefit payments after 7 January 2013, or who has a partner who received the benefit. The partner with the higher income is liable to pay the charge if both partners have income over £50,000.
Those who stopped child benefit payments before 7 January 2013 do not need to take any action.