Families where one parent has a taxable income of more than £50,000 are required to sign up for self-assessment. If they continue to receive the benefit without registering, they could face a penalty from HMRC.
HM Revenue and Customs (HMRC) has revealed an estimated 165,000 people have failed to register with the tax authority in time regarding collection of their child benefit. Failure to register with HMRC for collection of child benefit will result in a penalty of between 10 and 100 per cent of the child benefit paid, in addition to refunding the appropriate amount.
New rules implemented in January 2013 meant that child benefit was withdrawn entirely if one parent earns more than £60,000. Eligible families currently receive £20.30 per week in child benefit for their first child and £13.40 a week for any further children. The new laws ruled that this weekly payment is reduced gradually for families where one parent is earning a taxable income of between £50,000 and £60,000. Taxable income is earnings from employment and also includes income from share schemes and savings.
Around 29,000 people registered in the final hours prior to the Saturday 5th October deadline, and those who remained are being encouraged to complete the paperwork as soon as possible to avoid fines. The amount of benefit parents are not entitled to is retrieved by HMRC through the self-assessment tax system, which is why they need to complete a paper tax return by October 31st or January 31st online.
If you think you are in this bracket and haven’t done anything about registering for self assessment please contact the team at TI Payroll and Accounting and we can help.