HMRC issues 1-day warning for working parents who claim Child Benefit
Aneira Davies
Social and newsletter writerIf you claim this benefit AND earn over a certain amount you could be liable for an extra charge – and you only have 2 days left to register to pay
A warning has been issued to anyone who receives Child Benefit
Thousands of parents claiming Child Benefit who earn over £50,000 per year are subject to the High Income Child Benefit Charge – a tax on any Child Benefit they receive.
This charge is currently paid via self-assessment – the system which HM Revenue and Customs (HMRC) uses to collect income tax from people who have their own business or other sources of income.
And these parents have just 1 day left to register their details with HMRC, or face having to pay a hefty fine.
They have to register their details and their intention to fill in their tax return with the Government department before Thursday, 5 October.
Any parents who fail to do this could face a penalty – which could amount to 30% of what you owe.
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What is the High Income Child Benefit Charge?
Any parent who earns above £50,000 is subject to the High Income Child Benefit Charge and will have to pay tax on any Child Benefit they receive.
It's paid via self-assessment – but anyone needing to make the payment or declare this cash must register, if they haven't done so already.
They then have to declare the payments on a tax return at the end of each year, and pay any taxes they have accrued.
While the return itself is not due until 31 January 2024 (or 31 October 2023 if you fill in the paper version of the form), you'll need to register your intention by 5 October, in order to receive your Unique Taxpayer Reference (UTR), which you'll need to complete the form.
To avoid charges all together, you can opt out of receiving child benefit payments.
Who is subject to the High Income Child Benefit Charge?
According to the Government, you may have to pay the High Income Child Benefit Charge if you or your partner have an individual income that’s over £50,000 and either:
- you or your partner get Child Benefit
- someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep
To work out if your income is over the £50,000 threshold you will need to work out your 'adjusted net income' – your total taxable income before any allowances (including from savings and dividends).
You can do this by using the Child Benefit tax calculator on the Government's website.
Meanwhile, those who work for themselves on a self employed basis – and earn over £1,000 – will also need to register with HMRC in order to fill in a tax return for the tax year 2022-2023.
What if I'm not self employed?
If you're not self employed but your earnings are above £50,000 a year AND you're claiming Child Benefit, you'll need to fill in a tax return to declare these payments as earnings.
What if my earnings aren't over £50k per year?
Anyone under the threshold will not be liable to pay the High Income Child Benefit Charge, so there's no need to do anything.
Contact HMRC for advice
The rules can be complicated and have led to penalties as parents were not aware of the scheme. HMRC issued more than 150,000 fines for non-compliance in the 2019/20 financial year alone.
HMRC’s Director General for Customer Services, Myrtle Lloyd, says that anyone who doesn't know how the system operates can call HMRC for advice.
'If you are inexperienced when it comes to Self Assessment and don’t know how it operates – HMRC is available to support you.
'We wish to help customers correctly submit their taxes in one attempt.'
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