Penalties await parents who fail to notify HMRC
Parents whose individual income exceeds £50,000 - even if through a mix of salary and dividends - but who still receive child benefit must register for self-assessment within the next four weeks or risk a hefty penalty.
Issuing the reminder, HM Revenue & Customs said a penalty of up to 100% of the tax due could hit higher income parents if they still get child benefit yet fail to notify to be self-assessed by October 5th.
Registering with HMRC by the deadline will enable such claimants to avoid the ‘failure to notify’ fine; declare the benefit received and pay the tax charge. In fact, 10% of the benefit payment will be deducted for every £100 earned over £50K.
Letters from the Revenue are currently being sent to around two million higher rate taxpayers, including those caught by the child benefit claw back, reminding them to pay the High Income Child Benefit Charge, which came into force on January 7th 2013.
“People who fail to register could face a penalty of up to 100 per cent of the tax due, depending on the circumstances,” warned HMRC.
“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.”