Warning over child benefit tax

HMRC is threatening all those liable to the high income child benefit charge (HICBC) with a fine unless they’ve registered for self-assessment. What’s the full story?

HICBC recap. Since 7 January the high income child benefit charge (HICBC) applies if you or your partner have annual taxable income of £50,000 or more and, of course, are receiving child benefit. The charge is collected through the PAYE system or self-assessment (SA), or a combination of both. HMRC now wants to check that everyone liable to pay the HICBC is declaring it.

Not in self-assessment. HMRC’s website recently carried a prominent warning. It said: “If you are liable and have received a Child Benefit payment since 7 January then you must register for Self Assessment by 5 October 2013 to pay the charge.” It goes on to say you’ll face a penalty if you don’t. It now seems many people have missed this deadline. If you’re one of them, don’t worry - HMRC has rather overstated the problem. The 5 October deadline isn’t the black and white cut-off date HMRC would have you believe. You still have time to avoid a fine. Plus, despite HMRC’s warning, you might not have to register for SA at all.

HICBC paid. If your tax code was adjusted to pay enough extra PAYE tax to cover the HICBC for 2012/13, you don’t need to register for SA, unless there’s another reason to do this. Even if you are required to, you still have time in which to do it without a incurring a penalty. You can register for SA and online filing at the same time. This will give you until 31 January 2014 to submit your tax return. Bear in mind that while registration for SA can be done over the phone, it will take a couple of weeks before you can use the online service.