Child benefit: Have you missed the tax deadline?

Back in January 2013, we reported that the rules on child benefit were changing. The new rules meant that families in which one parent earned more than £50,000 a year could no longer claim the total amount of child benefit. Whereas families in which one parent earned more than £60,000 a year were no longer entitled to any child benefit.

The way in which child benefit was claimed had also changed, with parents giving two choices of either opting to have the total amount of benefit, whether they were entitled to it or not, and then filling in a self assessment tax return where the tax office would calculate how much you were entitled to (if any), or, if one parent earns over £60,000 and is therefore no entitled to any child benefit, you can choose to stop claiming it, meaning the tax man does not have to get involved at all.

The problem now is that many people who have opted for the first choice of having all their child benefit, also had to register the amount they received this year with the HMRC, or they will face penalties.

And one deadline, October 4th, last Saturday, has already passed, with an approximate 165,000 missing out on registering. Meaning that unless they register within the next few days they will face further penalties, and this is on top of a possible tax bill for claiming too much child benefit.

A spokesperson for the HM Revenue and Customs said that people who have not registered should do so now to avoid further costs. He said: “More than 29,000 people registered for self-assessment over the weekend, taking the total registrations to 160,000.

This means that 165,000 people still need to take action and on past experience we expect more people to register in the coming days. Although we are past the deadline, people should still register for self-assessment to minimise any penalties they may face.”

There is some hope for people who have failed to register as there will not be automatic fines issued; the HMRC said that each case will be looked at on an individual basis.

As child benefit is now calculated in a sliding scale where mothers or fathers earn between £50,000 and £60,000, those who opted to have the full entitlement and failed to register may not only face fines but could have most of their benefit taken back by the HMRC office.

However, the HMRC chief executive, Lin Homer, said last Friday that as lin-homertwice as many families had opted out of receiving the payment than had been expected, she thought that the changes were going “better than expected”.

Homer spoke on Radio 4’s Today programme: “I think we have been very proactive. We have written to 800,000 people. 1.2 million is the estimate and of course things like people’s income changes during the year so we have written to everyone we know is affected by the change.”

It is thought that fines issued could be between 10% and 100% of actual the child benefit paid. However, HMRC says that if people register and pay the tax by 31 January, it is unlikely that they will be penalised. Homer advised: “HMRC is committed to helping people pay the right amount of tax and urges parents who have been affected by the changes to child benefit to register for self-assessment,” she added: “We know that lots of people leave it until the last-minute.”

For more information about child benefit, visit the HRMC website or Claiming Child Benefit – Money Advice Service

Featured image copyright: OJO Images / Rex Features

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